There are primarily three opportunities to buy foreclosure homes:
All three of these foreclosure-buying opportunities can be found on RealtyTrac, and I was challenged to see if I could cover all three in a 60-second video. I rose to the challenge with the following:
- Pre-Foreclosure (Short Sale): After the property has started the foreclosure process, the homeowner in foreclosure (often called the distressed homeowner) may be interested in selling the property to avoid foreclosure and get out from under the mortgage debt. In today’s market, these pre-foreclosure sales are usually short sales, where the sales price of the house is less than what is owed to the lender. Nationwide, pre-foreclosures sold for 21 percent less than properties not in foreclosure in the first quarter of 2012. More about buying a short sale in pre-foreclosure.
- Auction: If the distressed homeowner does not sell during the pre-foreclosure period (anywhere from one month to a year, depending on the state foreclosure process) the property will be auctioned off to the highest bidder at a public foreclosure sale. These auctions typically occur at or near the local courthouse and often require full payment in cash from the winning bidder. More about buying at foreclosure home auctions.
- Bank-Owned: If the property does not sell to a third party at the public foreclosure auction, it is repossessed by the foreclosing lender, who then will usually evict the distressed homeowner (if the homeowner is still living in the home), perform any repairs they deem necessary and then market the property for sale. Nationwide, bank-owned homes sold for 33 percent less than properties not in foreclosure in the first quarter of 2012. More about buying bank-owned homes.
I know this goes through the website at a very rapid clip, but hopefully provides the type of high-level overview that will be helpful. In the near future I’ll create three separate videos, each focusing a little more in-depth on each foreclosure-buying opportunity. Maybe those will be 90-seconds each.
I’d also like to get your input on the types of instructional videos you’d like to see about how to effectively use the RealtyTrac website. Use the comment section below to provide your suggestions.
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