Investing in the real estate market is a popular way for individuals to earn residual income and build wealth. This type of investment has become popular, making it a little more difficult to land the properties you want. Understanding the basics of investing in foreclosed and REO properties can save you time and money as you jump into the investment market. Here are a few things you should understand to maximize your profit and reduce your stress:
Types of Foreclosed Properties
When purchasing real estate for investment, many buyers opt for homes that are pre-foreclosure, auctioned off or owned by the bank. This type of investment can save you money. There are some differences between each of these types of investments and working with agents selling homes in Marlton, NJ can help you decide which works best for you.
Pre-foreclosure: You can get some fair deals if you purchase a home during the pre-foreclosure phase, but this is the most difficult way to purchase this type of property. You will most likely spend more money than if you waited until the bank purchases the home or the home is placed up for auction and you will have to deal with the homeowners, which presents its own set of difficulties (emotional attachment, refusal to negotiate etc.). Homes in the pre-foreclosure stage are not technically for sale yet, but homeowners may be looking for a way to get rid of the home to avoid the damage to their credit. A Marlton, NJ realtor may not be involved at this point.
Home in Foreclosure: Homes in foreclosure means the owner of the property was unable to satisfy payment requirements so the bank or lender took the property back. The foreclosure process can take a while, but once it is complete, the bank/lender can auction the property off to interested buyers. There is some risk in purchasing these types of homes because the owners may have not taken care of the property and you may not have access to inspections. Talk to a New Jersey real estate agent to find out more about foreclosed properties in your area.
REO (Real Estate Owner) Properties: If a home does not sell at auction during foreclosure, the lender or bank reacquires the property. In most cases, this is the best time to buy a home because the lender or bank will want to get rid of the property quickly since it is not earning them any money. During this process, the lender may remove liens or title fees etc. and you will have access to property inspections. Working with the best real estate agent Marlton, NJ helps the lender and the buyer.
Purchasing a Foreclosed Home
Purchasing foreclosed or REO owned Marlton real estate New Jersey takes commitment, a little risk and the financial ability to invest time and money into your new property. A real estate agent Marlton, NJ can help.
For sakes of saving money, let us assume you want to purchase a home during foreclosure or after the bank has purchased the property. Both stages will save you money but both are vastly different processes.
During foreclosure, the homeowner can attempt to sell the home to pay off the mortgage or the bank takes over the property and sells the home. Once the bank takes over the property, they can place the home up for auction. The county must schedule give the public at least a 10-day notice of the sale by mail. Some states require up to 21 days before the property is eligible for auction. Depending on the sale, the county can set a minimum bid on the house or just sell the home to the highest bidder, no matter what the cost. Make sure to speak with your realtor in Marlton, NJ to know the specific rules of the county you want to purchase a home. Most auctions take place in public. The homeowner has 10 days after the purchase of a sale to reclaim the home if they can pay off the mortgage and any associated fees.
REO properties are homes that failed to sell at auction. Because the home did not sell, it is possible to get a better bargain on a home during this process. However, many of these homes could be in poor condition, so make sure to check inspection records and look at the home before you make an offer. In many cases, lenders and mortgage companies will work with real estate agents, like us, to help market and sell their property. This ensures the home gets more visibility. Because we have access to information on these types of properties, we can help you determine whether this type of investment will work for you and which of the available properties might suit your needs the best. To increase your chances of success, make sure to get prequalified for a home loan or have the purchase price saved in cash. Additionally, you should be prepared to move quickly once the lender approves the sale. Because most companies want to get rid of these properties, the process may go much faster than you anticipate.
When purchasing a foreclosed or REO property, it is essential to understand the risks and benefits of taking on this type of investment. These properties are usually sold as-is. Working with a professional agent will ensure that you save as much money as possible on your investment so you can fix up your new property to sell or rent.
Call Roxanne Ardary today to learn more about REO and foreclosed properties in South New Jersey today.