The mirage of auction participation and bidding, including here the auctions organized for selling real estate foreclosures, has been tailed by lots of myths and legends. Foreclosed properties have constantly been associated with the low costs, great houses, and stunning bargains. However, this is not the entire truth!
Here are some of the myths gravitating around real estate foreclosures that worth being known before getting caught too deep into such a transaction.
People generally assume that since the property in question has been labeled as foreclosure, then it will be sold for little money. Well, don’t expect to get a foreclosed property for 100 bucks! This is not a bet; almost certainly we’re talking about a bid. But you can bet your money that the highest bid wins! A good deal comes along with a carefully prepared bid. An accurate and sound bid implies a lot of research in the field to establish the neighborhood, assess property’s condition, evaluate the amount of repair and touch up works needed, and find out possible legal matters clouding the title. Unrealistic offers are quickly rejected. As long as you stay within some reasonable boundaries, everything related to interest rates, price, and down payment can be negotiated.
Another misconception when buying real estate foreclosures is related to the quality provided. A common belief is that there might be hidden liens or judgments attached. In reality, lenders’ interest is to secure the foreclosed property’s clear title. So, the lender, typically the senior lien holder, wipes out all junior lien holders or judgments in the process. Because, let’s face it: no big corporation would go through the time and effort consuming process of foreclosing so that in the end to lose the property for a few thousands in back taxes. A foreclosed property is generally sold with clear title, all related costs being included in the final price. So, if you heard that the lender must sell the property for the same amount paid at the auction, your information source cannot be trusted.
Don’t assume that lenders are in such a hurry to sell the real estate foreclosures that they will bend over backwards and accept just about anything. It is true that lenders are in the money business, not in the real estate business, and consequently they are only interested in getting the investments back as soon as possible, even partially. Lenders banks, government agencies or financial corporations usually market the foreclosed properties owned through recognized real estate brokers or agencies. Some agencies are specialized in real estate foreclosures, so they represent the interests of the lenders and place directly into their pockets the big discounts applied when selling a foreclosed property.
Unfortunately, there is so much misinformation regarding lists of foreclosed properties, whether bank or government owned, pre or post-foreclosure. Many consumers are puzzled by the onslaught of real estate foreclosures information services and listings posted on various websites offering the lure of free use and benefits. If you are looking for a large trustworthy selection of foreclosed properties at your disposal, then you would want to look into joining a daily updated online database service such as foreclosureconnections.com. All you need to do is become a member and you are granted an immediate access to finding the foreclosed property that best suits you.
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