Real Estate Foreclosures – Is Now the Right Time to Invest?

This is the time to buy and buy low in the residential real estate market. In the United States, foreclosure rates have reached an all-time high as people struggle to keep their homes and pay their mortgages. The reasons for foreclosures are numerous. One thing is certain, however, and that is that the country is headed for a recession, if we are not already there.

The residential real estate market affects the entire country. When it crashes, it’s like the stock market crash. The whole world suffers. The only people who do well are bankruptcy and divorce lawyers and doctors, who are always needed. Auto repair shops also tend to do better in a down economy, as people push to fix old cars rather than buy new ones. Everyone else is hit very hard. The collapse of the residential real estate economy triggers a domino effect, and the dominoes are already beginning to fall.

You can expect to see many more foreclosures on the market. Foreclosures are often located in blighted areas during times when the market is booming. Now see foreclosures almost anywhere, even in exclusive neighborhoods.

A foreclosure occurs when the property owner can no longer pay their mortgage and the bank takes over the property. The owner is evicted and the bank or lender sells the property to someone who will cover the cost of any past due debt. Banks and mortgage lenders don’t want to hold on to properties, so they are willing to let them go as long as they get the money they invested in the mortgage.

Buying a foreclosed property is not difficult. You need to have cash ready, as well as a certified check for the down payment. You need to be able to show that you can afford the house to finance it, so you’ll need to show that you have the money for a cash sale or a pre-approval letter from a mortgage company. You will also bid for the property together with other people.

You should not be discouraged if you are rejected. If you continue to bid on foreclosures, you will eventually get a property and then be able to fix it up and rent it out to a tenant. You can keep the property until the residential real estate market changes and becomes a seller’s market. This will be noticed when the demand for homes is greater than the supply and will cause the value of homes in your area to rise significantly.

You can find a list of foreclosed properties at your local county courthouse. This process has to go through the judicial system. The owner must be evicted by the sheriff and the sale of the property must be public knowledge. Everything that goes through the judicial system is recorded.

Real estate agents have a list of houses in foreclosure. These are owned by banks and lenders and this information is also public record. If you are working with a real estate agent, they should be able to show you houses in your area that are in foreclosure.

Keep in mind that these homes have already been vetted by savvy investors before they hit the market and are a better long-term investment, or a home you plan to live in, than a home that can be quickly fixed up and sold.