Beginners Guide to Investing in Foreclosed Homes


by Jat Bhoon - Date: 2007-02-26 - Word Count: 436 Share This!

You might ask, what is a foreclosed home? A foreclosure on a home is a house that has been repossessed by the financing company, because of a contract default. For some reason, the owners of the property were not able to fulfill their binding contract on the property, and because of lack of payment, the finance company took it back. When something like this happens, the finance company now has a home they need to get rid of. Most finance companies are not in the business of selling homes, they just lend money to buy them, so they will list the home with a realtor in hopes of selling it, and the home becomes a real estate foreclosure.

You can often get a great buy on a real estate foreclosure, because these types of homes are usually set up for a quick sale. As long as the home is sitting vacant, it is costing the finance company money. There may even be outstanding taxes that the finance company is responsible to pay, as long as they are the owners of the property.

Another great advantage of bank repossessed home investing (foreclosed homes) is that the buyer is always in the driver's seat of every real estate deal. The main reason for this is, because the bank would be more than happy to unload the house as soon as possible in order to recover their losses and start to make money again. At bank repossessed home investing, the buyer may have a better bargaining power and may be more than likely to get a better deal than with buying other types of real estate properties.

Basically what the bank is looking to get for the foreclosed home is roughly the amount owning on the home. This is great, because this amount sometimes can be significantly less than what the market value of the home might be. A lot of people will purchase a foreclosed home, make some minor renovations and clean it up and sell it at market value for a large profit.

Another benefit of purchasing foreclosed homes is that a buyer will purchase the home below market value and then rent it out. This is great because then the renter is essentially making your mortgage payment, which in turn is helping you build equity in your new rental property.

Also the taxes that come with a new home are not included in a foreclosed home. This can help you save some money when purchasing the home. So being a smart investor and doing research in your city on foreclosed homes can help you make a hefty profit in the end.


Related Tags: property, investing, property investment, foreclosure, homes, foreclosed, houses. properties

To learn more about foreclosed homes, visit my blog at http://tips-and-secrets-of-foreclosure.blogspot.com/ , which has some great tips and secrets surrounding foreclosed homes.

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