A veteran of the real estate industry, Sergio Garcia purchased his first investment property at the age of 18. With more than two decades of experience under his belt, Sergio Garcia oversees foreclosed properties at Chicago Real Estate Leaders as a sales manager.
When purchasing a foreclosure, it is necessary to understand different types of foreclosed properties. A pre-foreclosure, for instance, occurs when homeowners are unable to make timely mortgage payments. They negotiate terms with their lender to sell the property below market value, known as a short sale, in an effort to preserve their credit. Upon signing the agreement, the homeowners vacate the property.
In most cases, short sale properties are in good condition. Potential buyers may request to have a property inspected, but a financial institution does not have to make repairs. A lender must also agree to accept less than the outstanding balance of a mortgage loan before the property can be sold to a new homeowner or investor.
If a home does not sell during pre-foreclosure or a lender refuses a short sale, the home is placed in foreclosure to be sold at auction. An auction limits a lender’s ability to profit from a home. Funds garnered during an auction pay liens, typically leaving no overages. The winning bidder is required to pay for the property in cash or with a cashier’s check. Some states allow good-faith deposits. Foreclosed homes traditionally are winterized and sold in as-is condition.
When purchasing a foreclosure, it is necessary to understand different types of foreclosed properties. A pre-foreclosure, for instance, occurs when homeowners are unable to make timely mortgage payments. They negotiate terms with their lender to sell the property below market value, known as a short sale, in an effort to preserve their credit. Upon signing the agreement, the homeowners vacate the property.
In most cases, short sale properties are in good condition. Potential buyers may request to have a property inspected, but a financial institution does not have to make repairs. A lender must also agree to accept less than the outstanding balance of a mortgage loan before the property can be sold to a new homeowner or investor.
If a home does not sell during pre-foreclosure or a lender refuses a short sale, the home is placed in foreclosure to be sold at auction. An auction limits a lender’s ability to profit from a home. Funds garnered during an auction pay liens, typically leaving no overages. The winning bidder is required to pay for the property in cash or with a cashier’s check. Some states allow good-faith deposits. Foreclosed homes traditionally are winterized and sold in as-is condition.
