Three Great Opportunities to Purchase Erie Foreclosures

Erie foreclosures like all other mortgage foreclosures have three phases that are opportunities for investment. The first is the pre-foreclosure stage, the second is the auction stage and the third is the Real Estate Owned (REO) stage. Each one of these has pros and cons.

In the pre-foreclosure stage you will be in contact with the homeowner and work directly with them. You can also work with the lender directly at this point with the aim of creating a solution that works for everyone. If you go about things correctly at this point you can get discounts from 20 to 35 percent of the market value of the property. The disadvantage at this point is that sometimes it may not be so easy to get in touch with the property owner. Additionally, competition is stiff and you may also need to work with liens holders and include them in the deal.

Stage two, when the property goes to auction, is actually the stage with the highest reward. The discounts are as high as 35 to 45 percent off the value in the market. This means that the return on investment is very high and is great for resale. The cons at this point are that auctions tend to be postponed often which wastes time. Additionally, you will rarely have an opportunity to have the property inspected which means it is a gamble. A title search, which is necessary to be on the safe side, tends to be expensive. You will also need to put down a check of at least 10% of the purchase price and will need to pay the rest within a very short time.

Purchasing your Erie foreclosures at the REO stage is one of the easiest ways to acquire property. At this point the lender owns the property and is trying to sell it off to cut the losses, this means that he is in a hurry to sell. The advantages at this point are that majority of the times the lender holds most of the liens so you will not need to negotiate with others. The title will be clear as well. Usually, all property tax arrears at this point have been cleared by the lender and he may have made repairs as well. The main disadvantage is that the savings are lower at 5 to 15 percent.