Foreclosure Properties – Good Deals the Order of the Day

There was a 7.6% drop in single family home’s median price in the second quarter of 2008 as compared to the first quarter across the nation, said a report released earlier this week. It added that foreclosure properties involved in bank sales accounted for values of homes going down in around seventy five percent of the cities in U.S.A.

With the housing bill that was passed by President Bush last month making a provision for first time home buyers to be eligible for loans of up to $7,500, people who have toyed with the idea of buying their first home will now have another reason to pursue the idea.

Foreclosure properties should be looked at as an option because they are known to offer some very good deals. Houses have sold for as little as half of their market values. Of course, there is the house in Detroit that has supposedly sold for $1, a one in a billion chance, a chance nevertheless.

Houses can be bought at different stages of the foreclosure process. A ‘short sale’ is where the home owner sells the house before being foreclosed upon. The second stage is the auction. The last is, when the title of the property is with the lender.

A home owner facing foreclosure would generally try to sell the home before being foreclosed upon. By selling the house the home owner can pay back what is owed on the mortgage and thereby avoid foreclosure. There are occasions when the market value of the house is lesser than what the home owner owes on the mortgage. In cases like these, in accordance with the lender, the property can be sold for an amount lesser than the balance on the mortgage. If directly buying from a home owner, then public records can be used to find out if there are any other loans or taxes that haven’t been paid on the house in question.

While dealing with a bank, the other liens and unpaid taxes are usually taken care of by the bank itself. Banks try to sell homes as soon as they can because they have to spend a fair amount of money in the upkeep of the home.

Auctions, ideally, should be left for the pros.