The recession is hitting hard, especially in America. This has been reflected in the rocketing number of foreclosed properties on the US market; bad for the owners but for those looking for a bargain, these properties can pose an interesting opportunity.
There are a lot of people looking for bargains, to the extent that realtors are running foreclosure bus tours, taking eager punters who are ready to buy on tours of foreclosed houses in the area.
Almost one third of the properties on the American market are bank-owned. Foreclosures have been labelled as the bargain hunter’s dream, which is sometimes the case.
Recent surveys have suggested that despite the numbers of foreclosed houses which have been flooding the housing market, people are less keen to buy them for concerns about hidden costs and problems that may be involved. This is fuelled by information from real estate agencies that about half of foreclosed properties sold by mortgage companies have substantial damage, from missing pipes and appliances to damage caused by angry evictees. Thus it is very important to check the property carefully and make sure that work that needs doing is reflected in the price.
Foreclosure is the US word for repossession. The process is very specific with timelines and processes. When the homeowner falls behind on their mortgage payments a house will be in pre-foreclosure (also known as short sale) for a period of time and if it doesn’t sell during that time the bank will eventually foreclose.
During this time the owners are often desperate to sell, so a bargain could be had. But in a short sale situation there are many issues to be looked into and it can be a lengthy process. In this case the owner is still selling the property, whereas in the case of foreclosure the lender sells the property and the (now former) owner plays no role.
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Amanda Lamb is on her travels finding you the ideal location for your new house
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