When circumstances become such that a homeowner is unable to make his or her mortgage payments, the lender who holds their mortgage is oftentimes forced to foreclose on the property. In a foreclosure proceeding generally, the lender's representative conducts a public sale of the foreclosed property on the County courthouse steps. The proceeds go first to the mortgage holder to settle the debt, and if the sale exceeds the mortgage due, the reminder would go to other lien holders.
If you happen to be in the market to purchase foreclosed homes in Burleson, Mansfield, Arlington or the Fort Worth area, there are some things you should know about this type of investing. Those things include: - Don’t be surprised that you won’t be able to purchase a foreclosed home for pennies on the dollar. Occasionally, you may find foreclosures which sell at 30 to 40% below market value, but most foreclosures sell for about 5% below market value.
- If you purchase a foreclosure from the lender who holds the mortgage, that lender is most interested in getting back the money that they are owed on the property. If they are anxious for a sale, the lender may make the home more attractive using buyer incentives. For example, the lender may waive some or all of the closing costs, or perhaps offer special interest rates, or even a lower down payment.
- As with any investment, it is wise to spend some time and patience to research the foreclosure. The foreclosure process is often a complex one. To be assured you are proceeding wisely, don’t move forward with the purchase until you have addressed all the issues so you will be assured you are making informed decisions.
- The foreclosure process usually starts after the homeowner has fallen behind several months on payments. It may even be a year or longer before the foreclosed home is actually put on the market. One thing to keep in mind is that home maintenance issues may have been ignored during this period.
- Some foreclosures are sold “as is.” A foreclosed home in disrepair may have a low price tag, but don’t underestimate the expense of time, renovation cost, and even the frustration that may be involved in making the home habitable again.
- It is also important that you know about any liens or unpaid taxes for the property. Here again, you’ll need to establish who will be responsible for those fees. Oftentimes, the purchaser will be responsible for those additional costs, though in a few cases there may be room to negotiate.
- In a downturned real estate market, you’ll often find foreclosed homes in a variety of neighborhoods, from low income to affluent communities. This can be an opportunity to invest in rental property, or to upscale your own personal residence.
The list above covers only some of the key issues. The foreclosure process is usually a complex one. And, you may find that a broad review of properties for sale in your desired area will identify “good deals” for homes that aren’t in foreclosure. Working with a professional who is experienced in navigating the foreclosure process will assure that your “great deal” is just that. If you are interested in purchasing foreclosed properties, please feel free to call us at 817-909-7197, or use the form below to send an email. Take advantage of our expertise to make sure you’re satisfied with your investment! |