What is Foreclosure and How Can it Work for Me?
Are you interested in Arizona foreclosures? Foreclosure refers to the formal process of repossessing a house. This is a legal proceeding in which the lender (and rightful owner of the property) extinguishes the rights, title and interest of the borrower to the property. This action is brought on by non-payment or defaulting some other term of the loan. The legal side of this process exists because, traditionally, the lender cannot be sure that it can repossess the property. Therefore, the court can help the lender to foreclose on the “equitable right of redemption.” In addition to the loan amount, the lender can also foreclose on the right of redemption for overdue taxes, contractor bills and homeowners’ association dues.
Phoenix real estate foreclosures and Scottsdale foreclosure homes actually make up the majority of all home sales for these cities. Many investors realize that buying foreclosed homes is a great way to save on higher priced real estate. They can buy the home at a minimal cost and renovate it with saved money later on.
At this point, Phoenix and Scottsdale foreclosure homes are costing the bank a lot of money. In most cases, the bank (or the lender) will simply let the home go for a low price that covers their losses. Make no mistakes about it-foreclosure is a last resort and it is usually an action that benefits no one except for the new home buyer. In fact, many new home buyers who haven’t been able to afford a home in recent years, are now able to purchase a home because of the discounted prices associated with the foreclosure homes. Foreclosures are expensive gambles to lenders, but still more preferable than letting a borrower live on rented land for free.
While many homeowners aren’t afraid of the idea of renovating a rundown house, the term “foreclosure” still scares them. Is there a way to “safely” buy a house in foreclosure? First, understand the difference between foreclosures and bank-owned property sales. When you buy Phoenix and Scottsdale bank owned homes you are buying the property from the bank. The bank has already successfully foreclosed the home and is now trying to get some of their money back.
A bank-owned property is safer than a foreclosed home, because a foreclosed home will often come with back taxes, liens and more rundown areas in need of repair. While bank owned properties are safer than foreclosed homes, understand that foreclosed homes usually sell for less-sometimes 35% or more off traditional home value. Sometimes foreclosed homes sell for the principal balance of the abandoned mortgage. Sometimes that can be dirt cheap! The disadvantage to you is that you have to go to the auction and bid on the house.
However, if you’re looking for the absolute lowest price, it doesn’t get any cheaper than a foreclosure auction. Find out more by talking to a foreclosure specialist at The Holm Group. Call 480-206-4265 today