According to YourDictionary.com the definition of foreclosure is “the legal procedure for satisfying claims against a mortgagor in default who has not redeemed the mortgage: satisfaction may be obtained from the proceeds of a forced sale of the property”. (1) Nowhere in this definition does it say foreclosure is the end of the world. Most people agree foreclosure is an undesirable circumstance, however reality does not always consist of what was planned or expected and it is important to make the most out of any situation. Real estate has ups and downs just like life and it is important to uncover positive opportunities and outcomes whenever possible.
The Current Foreclosure Market
The third quarter of 2008 downturn in the real estate market has created a struggle for many homeowners across the country. In the article “Foreclosures dominate homes sales” published February 3, 2009 on CNNMoney.com, staff writer Les Christie discusses a report from Zillow.com that announced almost “20% of the nation’s home sales in 2008 were bank repossessed properties.” “Another 11% were short sales, in which homeowners owed more in mortgage debt then their homes were worth,” the article continues. “More value [was] wiped out in the fourth quarter of 2008 than was eliminated in all of 2007,” states Zillow’s VP in charge of data and analytics, Stan Humphries.
In the third quarter of 2009 real estate foreclosures hit a record high. According to an October 15, 2009 report from RealtyTrac.com, one of the largest online marketplaces featuring foreclosed properties, the number of foreclosed filings increased by 5% from the second quarter of 2009 to the third quarter 2009. The third quarter of 2009 shows “an increase of nearly 23 percent from Q3 2008.”
Debunking the Myths of Foreclosure
Myth 1. Foreclosure has no upside.
Foreclosure allows some buyers to purchase a home they may not have been able to otherwise. Investors can also often find foreclosed properties to repair, renovate or maintain for affordable prices. Although foreclosure is a difficult experience for any homeowner it can create an opportunity for some buyers.
Myth 2. The previous owner of the foreclosed property is still responsible for repairs and home inspection.
Once the bank has foreclosed on a property, the previous homeowner is not responsible for any repairs or upgrades to the home. It must be purchased “as is”. Have a real estate agent refer you to a trustworthy, experienced home inspector to thoroughly inspect the property and all of the home’s systems.
Myth 3. Buying foreclosed property is a great strategy for any buyer searching for a cheap home.
Homebuyers or investors interested in purchasing foreclosures must be patient and confident. Investors especially must be savvy, ask the right questions and have experience buying and selling since accurately estimating the cost of repair and maintenance is essential.
The Relationship Between Foreclosure and Real Estate Investment
All in all, foreclosure can create real estate opportunities for homebuyers. Many real estate investors understand the perks of currently making a long term, real estate investment and when they have funds, purchase foreclosed properties in cash. These investors realize that over the next few years as the job market bounces back the housing market will follow.
Choose a Real Estate Agent with Experience and Expertise
Whether you are looking to buy your first home or you are a savvy investor, if a foreclosed property interests you be sure and speak with a knowledgeable real estate broker that knows what is involved in the purchase of repossessed properties. The support of a trained real estate professional ensures your real estate transaction will go smoothly and end successfully.
Real Estate Resources:
(1) http://www.yourdictionary.com/foreclosure Webster's New World College Dictionary Copyright © 2009 by Wiley Publishing, Inc., Cleveland, Ohio.
Used by arrangement with John Wiley & Sons, Inc.
(2)http://money.cnn.com/2009/02/03/real_estate/foreclosures_dominate_housing_market/index.htm
(3) http://www.realtytrac.com/foreclosure/foreclosure-rates.html
Source: http://www.ArticlePros.com/author.php?Nora Hall
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