Foreclosure Information for Real Estate Investors
For most people, purchasing a piece of real estate is one of the largest financial investments they will ever make. As you gain experience in buying and selling real estate, whether personally, or as an investor, you learn that there are a number of resources and additional topics that you should be aware of. One of the most popular subjects that real estate investors make sure to stay on top of is foreclosure information.
When it comes to real estate, foreclosure means that the mortgage has not been paid, and the property in question has since been taken back by the lender. At this point, generally, the property is sold or auctioned off in order to gain back any outstanding funds. Anyone is allowed to bid on these properties, however, these properties have to be paid for up front in cash.
Stages of Foreclosure
1: The foreclosure begins when a homeowner is unable to make their mortgage payments. After a few months of payments have been missed, the homeowner will be served with a summons from their creditors. Once the papers are served, papers are filed with the county clerks office and therefore, made public record.
2: At this point, any attempts that are made by the homeowner to borrow from public credit sources will be met with an overwhelmingly negative response. On completion of the publication process, the foreclosure action will be permitted to proceed and the delinquent homeowners have a limited amount of time to pay up, sell, or make other deals with creditors.
3: If none of these actions are taken, a foreclosure sale will then take place. At this point, if no one bids the amount owed, the property reverts to the lender and becomes what is known as a real estate owned property held in inventory by the lender.
For people that are interested in investing in real estate finding out as much foreclosure information as possible is an important thing to do. There are a lot of benefits to purchasing foreclosed properties and to staying on top of the latest foreclosure information. For new real estate investors, there are a few additional tips that they should be well aware of prior to purchasing a foreclosure property. These include, but are not limited to:
- Be aware that in many cases, homeowners that have fallen behind on their mortgage payments have also fallen behind on their home maintenance. This means that in a lot of cases there are renovations or upgrades that will likely be needed. Because of this, it is important to have either a home inspection or a property appraisal done whenever possible.
- The competition and bids for these properties tend to be either extremely tough or extremely easy. Many real estate investors appreciate the opportunity for a cheaper sale and therefore tend to follow these sales regularly. Depending on where the property is located, or what the demand for investment properties are in that area where help to dictate how intense the competition is.
If you are considering getting involved in real estate investments, making sure that you understand and remain up-to-date with the foreclosure information in your desired area and a market is a key step in achieving your real estate investment goals.