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Bob Schwartz
San Diego
real estate broker
Certified
Residential Specialist
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Buying Foreclosures In A Real Estate Recession
Across the country, Americans are watching the recession fall before
their eyes. It’s getting more and more difficult for people to pay their
mortgages and as a result, the number of foreclosures is increasing.
The residential real estate market effects the entire country. When it
crashes, it is just like the stock market crashing. Everyone suffers. The
only people who do well are bankruptcy and divorce lawyers and doctors, who
are always needed. Car repair shops tend to also do better in a down economy
as people strive to fix old cars instead of purchasing new ones. Everyone
else gets hit really hard. The crash of the residential real estate economy
triggers a domino effect and the dominos are already starting to fall down.
You can be sure of seeing a lot more foreclosures on the market.
Foreclosures are usually located in blighted areas during times when the
market is prospering. Now you can see foreclosures just about anywhere, even
in upscale neighborhoods. A foreclosure occurs when the owner of the
property is unable to pay their mortgage and the bank takes over the
property. The owner is evicted and the bank or lender sells the property to
someone who will cover the cost of any debt due. Banks and mortgage lenders
do not want to keep the properties so they are willing to let them go as
long as they get any monies they put out for the mortgage.
Buying foreclosed property is not difficult. You have to have cash ready as
well as a certified check for the down payment. You have to be able to prove
that you can afford to finance the house so you will have to either present
proof that you have the money for a cash sale or a pre-approval letter from
a mortgage company. You will also bid on the property along with other
people. You should not be discouraged if you get turned down. If you
continue bidding on foreclosures, you will eventually get a property and you
can then fix it up and rent it out to a tenant. You can keep the property
until the residential real estate market switches and it becomes a sellers
market. This will be noted when the demand for housing is greater than the
supply and will cause the value of the homes in your area to rise
considerably.
You can find a list of properties in foreclosure in your local county
courthouse. This process has to go through the court system. An owner must
be evicted by the sheriff and the sale of the property must be public
knowledge. Anything that goes through the court system is of record.
Real estate agents have a list of homes in foreclosure. These are owned by
banks and lenders and this information is also of public record. If you are
working with a real estate agent, they should be able to show you the homes
in your area that are in foreclosure. Be advised that these homes have
already been looked at by savvy investors before they came on the market and
make a better long term investment, or a home in which you plan to live,
than a home that can be fixed and sold quickly.
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