Three Types of House Foreclosures
Homer Forteza on Dec 24 2008 at 11:34 am
When it comes to house foreclosures, there are three many different types. These are the pre-foreclosure, bank foreclosure and government foreclosures. There are also other types of foreclosures like tax foreclosures and bankruptcy foreclosures but this article will focus on the most common three.
Pre-Foreclosures
Many home owners are now close to foreclosing on their home. As an investor you can help to relieve their suffering while also benefiting yourself by buying a property at a very low price in comparison to its previous and future market value. A distressed home owner may be relieved to know that someone is willing to buy their house before the bank takes it from them. You may even be able to offer to rent the home back to them. This relieves them of a massive debt, but allows them to stay in the family home. The best way to find pre-foreclosure properties is through real estate agents, pre-foreclosure listings, business associates and attorneys.
A pre-foreclosure stage is the time between when a home owner receives a Notice of Default and the day that the bank or lender puts the property up for sale or auction. Buying pre-foreclosures can be difficult but well worth it in the end.
Government Foreclosures
When an FHA home goes into foreclosure, the government sells the property. HUD registered brokers are allowed to place bids on these homes, so you will need to contact a broker or agent if you plan to buy house foreclosures from the government. Investors are unable to bid for the first 45 days, only owner occupiers can. This gives new home owners a chance to buy a house at a low price.
Tax Foreclosures
When a home owner can not make tax obligatory payments on their real estate, the property can go under a tax foreclosure. The owner then has a chance to repay the tax liability but in the case of non-payment, the tax authority is able to recover the liability by selling the property.
The above three types of foreclosures give you an idea of the different opportunities that are available to savvy investors and first home buyers who are looking for house foreclosure bargains.