Home Foreclosure Prices
Some home foreclosure listing services contend that you can find a 3BR/2BA home starting at only $5,000, often with little or no money down. But in today’s hot real estate market, such deals are rare. “You can buy foreclosed homes for as cheap as 30% or 40% below market, but most foreclosures sell for 5% below market,” said John T. Reed, editor of Real Estate Investor’s Monthly, a newsletter based in Alamo, Calif. Lenders holding the mortgage in default are highly motivated to sell and often give prospective buyers further savings by waiving a portion of closing costs or offering a break on the interest rate or down payment.
Homeowners in financial trouble before defaulting on the mortgage, have not likely had the resources to maintain the home. “Fixer-uppers” might fetch bargain prices, but repairs can boost the cost again. It’s important to check assessed values and sale prices of neighboring properties. While well-located homes in good shape generally don’t sell for deep discounts, rundown properties are sold more cheaply. There aren’t a lot of steals at HUD auctions, according to a study by Tim Allen, a real estate professor at Florida Atlantic University. Allen tracked sales at a HUD auction in Florida in 1998 and found that buyers paid prices very close to their assessed value. Sometimes an unpredictable buyers “frenzy” at HUD auctions can push prices to unreasonable levels, according to a CNNMoney.com report.
Understanding Home Foreclosures
The Foreclosure Procedure usually begins after a borrower has skipped three mortgage payments. Although the outlook may seem bleak, Avoiding Home Foreclosure is possible, and paramount because it can seriously affect your ability to qualify for future credit on major purchases, not just housing. Explore ways of rescuing your home, and the benefits and risks of Home Foreclosure Loans.