Grants Pass foreclosures can be a great way to find a home. But do you know all that you need to get the best deal? Is buying a foreclosure even the best deal? We will examine the pros and cons on this page, and when you are done reading it; you will be more prepared to purchase your next home.
Foreclosures are also known as an “REO” or “bank owned property”. There are when a borrower stops making the payments on the home and the lender takes the home back from them. The reasons for not making the payments can range from loss of job or income to someone who just doesn’t want to pay anymore and they are looking for a free place to live.
Sometimes a foreclosure can be a volunteer effort, where the homeowner gives back the property. Other times the lender or bank will have to forcefully evict the borrower to take back possession. Either way, it will have an impact on the borrower’s credit.
Just to be clear, they tend to only be a good deal for the buyer. Banks are not in the business of owning homes. They want to lend on them and collect the interest on the loan. So when they take a foreclosure, it is important to liquidate it and repay as much of the loan as possible. The lenders are even willing to take a little bit of a loss on the home, just to get it out of their inventory.
Grants Pass foreclosures, like other areas, will normally be sold at a lower price than the local market bares. This is to get them sold. The problem then arises when a non bank owned property tries to sell, or even a homeowner tries to refinance. Since the foreclosure is considered a comparable sale, it tends to drive down the prices of the other homes in the neighborhood. Eventually, this spills into other neighborhoods and next thing you know, no one can refinance because they owe too much
A foreclosure looks pretty bad as you might imagine. It will normally keep you from getting a new loan on a home for about two years. If you have a foreclosure, it is important to re-establish credit and keep it perfect. Then when it is time, you will be able to obtain a new loan.
First of all get pre-qualified. Most REO’s require that you are at least pre-qualified if not pre-approved. Pre-qualified just means that you spoke with a lender and they have reviewed some financial questions with you and they think you will be able to purchase a home at a certain price.
Find a Realtor that is certified in foreclosures. They will be the most likely to be able to advise you the best. After all they have been trained specifically on these homes. The designation for this is “SFR”. So if you see that on a business card, than is what it means.
Be prepared for it to take a little while. You are dealing with a large bank, most likely, and it will take a while to get them to accept (or counter) your offer. The good news is that it will most assuredly go quicker than a short sale.
Just because a home is a foreclosure doesn’t mean it is the best deal. Since the market prices have been driven down, homeowners that just want to sell have to compete for a good price. So sometimes, maybe even quite often, a regular sale from a homeowner is a better deal.
Imagine, if you will, that a foreclosure ends in a vacant home that is not being maintained, and compare that to a home where a seller is living there. The heat stays on, the yard gets mowed and other maintenance happens to make the home shine.
Short sales are another alternative, but if you are in a hurry, don’t even consider this. You will have to deal with the seller first and after they accept your offer, which they always do, then you have to wait for the bank to accept it also. This can take quite awhile, since they are agreeing to sell you the home for less than what is owed on it and they will probably have to write off the losses.
To start looking see our Grants Pass Foreclosures page. You will be able to browse all them at no cost or obligation.
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