Posted: July 30th, 2019
Foreclosures are houses that are on the market and can be purchased at a great price. The foreclosure usually occurs either as a result of the owner being unable to sell the property or because he or she failed to pay the mortgage, which resulted in the lending company assuming it and listing it for sale in an effort to recover expenses. Foreclosure affects thousands of Americans each year, with an average of 1 out of every 200 homes in the U.S. being foreclosed upon.
What Causes Foreclosure?
It’s not something any homeowner ever plans on encountering, but it happens quite often. It can occur due to job loss, salary reduction, medical bills, relocation, divorce, or excessive debt.
While most mortgage companies do not often foreclose on a home after a single missed payment, generally if within 90 days a homeowner is unable to catch up on payments, the lender will issue a notice of mortgage default, forcing the owner to vacate the property.
Know Your Options Before Going into Foreclosure
Going into foreclosure on a home can have a negative impact on your credit score and make it difficult for you to rent or buy another home in the future. Oftentimes, homeowners fail to realize the options that can help them avoid foreclosure. Depending on the circumstance, these may include a short sale, mortgage release, refinancing, or loan modification.
The Process of Purchasing a Foreclosure in Central Florida
Most foreclosures in the state of Florida go through the court system, which means the process could require up to six months from the time a notice of default is issued to the point of auction when the property is available for purchase. In Florida, homebuyers can purchase this type of property in the ‘preforeclosure’ period. During this timeframe, competition is not so strong and there is less likelihood for the current homeowner to claim right of redemption.
Below is a list of tips to consider before starting the purchase of a foreclosure:
Tip #1: Have a preapproval letter showing the amount you have available for a home purchase.
Tip #2: Consult a professional who is familiar with the foreclosure process.
Tip #3: Compare area properties for average prices.
Tip #4: Be aware that foreclosures are sold in “as-is” condition.
Tip #5: Depending on competition, be prepared to big higher in order to secure the property.
Bottom Line
Hire someone who will look out for your best interests, stay abreast of the details and keep the purchase process moving, and offer you objective opinions and advice. Once you’ve decided on a property, prior to making an offer, it is wise to have it inspected. Home inspectors or trained to identify issues that aren’t always easily visible, which can protect you from buying a money pit.
Let the Experts Assist You
While purchasing a foreclosed home can result in getting a lot of value for the price, there are very specific processes that differ drastically from a traditional home purchase. Thus, you would be better served working with an expert in the field. At TradaR Real Estate Solutions, help can be provided in understanding more about the foreclosure process in Central Florida.