Video:How Do Foreclosures Work?with Elizabeth Weintraub
If you think that buying a foreclosure is a good deal, there are a few important facts you should know before you decide to purchase one. Learn why houses are foreclosed, and what you can expect if you decide to pursue a foreclosure.See Transcript
Transcript:How Do Foreclosures Work?Hi, I'm Elizabeth Weintraub for About.com. Homebuyers think of pursuing foreclosures in a real estate market as a good deal. You may have an idea of a picture perfect house whose owner fell on hard times but your idea may be removed from reality quite far. So let me explain to you how foreclosures work.
Reasons for ForeclosureThe sellers may stop making payments for a variety of reasons. Most common are getting laid off from work, a divorce or excessive bill obligations. There are very few cases of people voluntarily going to foreclosures so keep that in mind if you choose to pursue one.
Buying a Foreclosed HomeThere are three ways to buy a home in foreclosure. You can buy a home from seller before the foreclosure is final, at the county courthouse steps during the auction or you can buy the home after foreclosure, directly from the bank. Foreclosure procedures vary from state to state.
Potential Issues With ForeclosuresAlso, realize that buying a foreclosed home brings about a host of emotional issue. You need to decide whether you are a type of person that will take advantage of a seller's misfortune and/or put a family out on a street.
Damaged Property and ForeclosuresMoreover, you need to know that a bank-owned foreclosure home may be vandalized or stripped by the angry home owners so it will be 'as is'. If something breaks or malfunctions, the current owners will not fix it. They previous owners sell appliances or try to destroy a home by flooding it.
And finally, you may need to evict the tenant or owner of the premises when you receive the title. Buying a foreclosed home is not for the faint of heart. It is not recommended by the first home buyers.
Thanks for watching. To learn more, visit us on the Web at homebuying.about.com.