This is a great lot for the hard worker. It is in fair condition. Walking location to town and a great value. 3 Bedroom, 1.5 baths, Madison school, 50x125 size lot, taxes$3908, Needs work.
As the national housing market continues to crunch, first time home buyers have a unique opportunity to capitalize on the American Dream of owning a home at a rock-bottom price. While this is an unfortunate situation for the homeowner in distress, first-time home buyers have a solid chance at buying desirable homes for massively reduced prices.
There are actually a few different ways for home buyers to take advantage of the record amount of foreclosures deals available on the market right now. Let’s review each scenario individually.
Preforeclosure
Homes in preforeclosure have not been foreclosed on. This type of home or property has a Notice of Default (NOD) (also referred to as Lis Pendens) filed against it. The NOD is filed by the lender anywhere between three to six months of non-payment on the loan. NODs are filed with the County Recorder’s Office.
Homeowners in preforeclosure typically are trying to sell before the home is foreclosed on and sent to auction. In certain situations, a first-time home buyer can pick up a nice home for an incredible value by buying the home for the amount remaining on the home loan.
For example, if a borrower had a piece of property in preforeclosure with a market value of $150,000, but only owes $100,000 on the loan, the real estate buyer could pay the $100,000 for the home and come out ahead.
Foreclosure
After the NOD has been filed against a home, an additional three months usually passes before for the home is scheduled for public auction. At this point, the borrower has just several days before the foreclosure auction to correct the situation or sell the property. After that, the home is considered in foreclosure and sold at auction.
This again presents an opportunity for first-time home buyers. When the property is processed through a foreclosure auction, anyone can attend and bid at the event. Buying a home at auction is considered a bit risky in comparison to other methods of purchasing a foreclosed home. However, if the bidder does his or her homework, it can be done.
Some things to keep in mind when purchasing at an auction are as follows:
Don’t go into the situation blind. Research the home to determine if there are any unpaid taxes, construction debts or liens. This can be done by ordering a title search on the land prior to the day of the auction.
Purchase After Foreclosure
When a home is not sold to an outside party at the foreclosure auction, it ends up in the bank’s hands. Banks are not in business to be homeowners. So as one can imagine, a foreclosed home is a lot like a hot potato.
Typically, the bank will pay for miscellaneous debts associated with the home, including IRS taxes, property taxes and so on. Banks also have the ability to negotiate price of the property, down payment, and closing costs with the first-time home buyer. Because it is ideal to sell the home, the buyer has a better chance at snapping up a dream home for an ideal price.
Purchase a HUD Home
When a federal Housing and Urban Development (HUD) or Federal Housing Administration (FHA) mortgage forecloses, the home is sold through a HUD program. HUD homes are pre-approved for an FHA mortgage, which means they are appraised and ready for sale.
Additionally, HUD homes can be purchased for less than market value, saving the first-time home buyer money. The downfall to HUD homes is they are sold on an “as is” basis. Real estate shoppers must also navigate the HUD program with the assistance of a HUD agent or broker who can submit an offer on behalf of the buyer.
Whether it is shopping preforeclosures or bidding on a HUD home, there are several ways for first-time buyers to realize the dream of owning a home without breaking the bank.
Contributed from eappraisal.com
