Foreclosures – Visit an Auction Or Use a Realtor?
By Doug E Smith
I’m sure you’re aware of the real estate and foreclosure crisis going on in the United States. Because of this, there is an excess of homes on the market. Obviously some properties will be run down in unappealing neighborhoods as usual, but what’s different this time is the surprisingly increasing number of well kept and even executive style properties that are up for sale for pennies on the dollar.
There are some great values out there but in order to take advantage of them you should first be aware of both the advantages and disadvantages of buying a foreclosed home at a government auction versus the conventional method using a Realtor.
Here are some advantages to purchasing a foreclosed or pre-foreclosed home:
- Price is the number one reason to purchase a foreclosure.
- Many homes are in good condition for much less than their market value.
- Variety and selection is better then it has ever been.
- No realtors or agencies fees to pay (consulting with a real estate savvy person is recommended).
- Insurance is optional. Results in additional monthly savings.
- Great investment opportunity (i.e. rent out or flip that house).
- Less risky then the stock market, as you own something tangible.
Disadvantages:
- Mortgages may be harder to get (unless you have great credit with your bank).
- There may be existing liens or unpaid taxes against the property.
The main caution is to properly check that the property is free and clear of any debt ahead of time. Also know in advance when the government auction expects payment for the house and have the loan details worked out with your bank. As with purchasing any house if you have enough cash handy (who does) that makes your profit potential much greater.
Government auctions are being held all around the US and Canada. You can find information about upcoming auctions and pre-foreclosures (homes you can buy before the auction) on the internet along with detailed listings on the homes that will be for sale. Purchasing a home through a government auction can be a very rewarding adventure but doing your research ahead of time will allow you to be prepared. In fact I would recommend attending a few auctions before you are ready to purchase so that you become familiar with that environment.
To find an updated list of foreclosures/pre-foreclosures on the best government auction sites check out government auctions review, or Bank Foreclosures & Pre-foreclosures
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