Government Foreclosures
Government foreclosures result from homeowners defaulting on mortgage loans insured by a government agency, including HUD or VA, which possess the majority of all government foreclosures. Once loans are in default, the agencies that guaranteed the loans immediately received the titles of the foreclosure properties, and the agencies place the foreclosed homes on public sale to mitigate their losses.
What do government foreclosure homes mean to investors or even those looking to find their dream home?
There are exceptional benefits for investors or homebuyersturning to foreclosure listings:
- Foreclosed properties sell for significantly less than market value. (Lending agencies are in a big hurry to be free of them because not only is real estate expensive to maintain but the agencies must cut their losses as quickly as they can.)
- Foreclosed homes can be located in even the best neighborhoods, creating greater potential for a rise in property value and giving you big bang for your buck.
- Government foreclosures are quick to acquire due to the nature of the process and the eagerness of lenders to be rid of them.
- The majority of foreclosure homes do not need major renovations.
How do agencies list and sell Government Foreclosures?
Government foreclosed homes are usually placed on public auction and can be purchased by anyone with the help of a real estate agent, broker, or servicing representative.
The agent, broker, or servicing representative must submit the bids for interested homebuyers. Because agencies have strict guidelines for bidding and access to foreclosure listings it is helpful to seek assistance from a housing counseling agency. These agencies provide very useful counseling services for those interested in buying foreclosed properties.
Government agencies list all available foreclosed properties on Internet listing sites maintained by companies contracted with the government agencies. There are special reductions and incentives for particular groups, including law enforcement officers, teachers, firefighters, emergency medical technicians, nonprofits and local governments.
The best thing to do as a homebuyer or investor is to contact a housing counselor or real estate agent or broker to help guide you through the process.
What is the process for purchasing Foreclosed Homes?
- If you know of particular neighborhoods or even specific properties that you have high interest in and have some knowledge of possible loan default , the first step that you can take is to visit county recorder sites online. All documents attached to any type of real estate transaction, the county recorder stores.
- Find a real estate agent or broker. If you would like additional help, you can contact a housing counseling agency.
- Bid on the government property/properties via a real estate agent, broker or servicing representative.
- If your offer is accepted you should get a home inspection, though be prepared that most foreclosure homes are sold AS-IS and without warranty. The inspection will allow you to make any necessary repairs that would need to be handled before move-in, rental, or sale.
There you can find names, addresses, phone numbers and other information concerning properties in default. The initial foreclosure document, which in most states is either the Notice of Default or Lis Pendens, holds this information and can't be given out by county recorders directly but information can be found online on the county recorder websites.
Or
You could find foreclosure listings online through listing sites maintained by companies contracted with the government agencies that are foreclosing on the properties. There are several sites to search on that have numerous foreclosed property listings.