Best way to buy a foreclosure home?
Question:
Answer:
Pea pod is right about buying in the pre-foreclosure phase of the process.
You must be aware of the pitfalls that go along with buying these type properties.
Research the title to insure that there is only one mortgage on the property or if you an afford two mortgages. You will need to assess and see if there is any damage to the property and the cost to repair the same. Make sure that all the damage is cosmetic.
You also want to make sure that you take title to the property the correct way, so you need to decide if you are gonna rehab and flip or rehab and hold. If you are gonna flip the property you might have in the contract something to the effect that you are the buyer and the seller is selling to the buyer and/or assigns. This way you can immediately transfer the property.
Purchasing the property this way also have the advantage of bringing the mortgage(s) current and taking the property subject to the existing mortgage, therefore you will not have to qualify for a new mortgage.
You may also purchase at the foreclosure sale.Doing it this way you will have to have the minimum amount of the bid which is normally what is owed on the mortgage in cash, cashier checks or funds drawn on a bank that is established in the state where the foreclosure sale is to be conducted.
I hope this has been of some use to you, good luck.
"FIGHT ON"
Girl! I'd go with Pre-Foreclosures. That way you don't have to come up with the cash up front and you aren't dealing with the banks. You are still able to deal with the owners of the home and obtain a loan to purchase. For example on a pre-foreclosures if they are defaulting on their mortgage and they owe 100K and their back default amount is like 5K you can probably get away with offering them about 150K for a house that is possibly worth 250K to 300K. They are few and far between but they are out there. For instance we just bought a house for 110K and it's work 300K. Woohoo! Instant equity and low payments for us first time homebuyers. I would try realtytrac.com to find these pre-foreclosures. Good Luck on this new adventure.
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