OpenOffer.com foreclosure

Not all foreclosed properties were created equal. If you want to explore the potentially lucrative world of distressed homes for sale and condos for sale, you need to learn a few things about the collection process. Repossession doesn’t happen all at once or over night. When people enter into real estate contracts with banks, they retain certain rights. Those rights make collection a multi-stage process for any creditor trying to repo a home. Understanding these different stages can be difficult, but it also presents opportunities. Each phase of foreclosure presents a new way to invest.

 

Preforeclosure

 

Prior to the bank actually stepping in and sending repo men to enforce a housing contract, the distressed homeowner will have the opportunity to sell the property on his own in an attempt to repay some of his debts. You, the investor, can come to the rescue and begin negotiating with someone in a very weak bargaining position. The homeowner still owns the property at this point, so he will need to consent to any deal, but you can use your superior negotiating position to drive his price into the ground.

 

Auction

 

Once the owner has failed at his last ditch attempt to unload his distressed asset, the property goes to auction. At auction the opening price will likely be far lower than the homeowner’s asking price during preforeclosure. This can be a misleading boon. There’s a chance that you will luck out and be able to purchase the property at a basement price, but there’s also the chance that competitive investors will drive up the auction price, forcing you out of the bidding.

 

REO Properties

 

If a property fails to sell at auction it reverts to the bank that held the original mortgage. If you are interested in purchasing REO properties you need to contact a realtor and begin the process of real estate negotiation to try and buy the repossessed property straight from the source.

Tags: , , ,

This is filed under Foreclosures.


     Twitter It!