Government Foreclosure Often Seen As Good Investment
There are different government agencies that can become owners of private homes for a variety of reasons, but in the past real estate investors often looked at homes acquired through government foreclosure as a good buy. Mortgages insured by the Veteran Administration or the FHA that wind up in default are often the subject of government foreclosure and are sold through public auction. Other types of foreclosure can be due to IRS sales, homes being sold due to unpaid real estate taxes, the Small Business Administration, among others.
People whose homes or businesses are threatened to be swallowed by government foreclosure, usually have up to the day of the public auction to make the necessary payment and save their home. In most instances, the entire balance of the note will be needed in order to save ownership, but in some cases it may be possible to find another lender willing to take a chance on another loan. However, when they are lost, the normal process allows the first bid at an auction for government foreclosure to be two-thirds of the appraised value.
There are a few rules when buying government foreclosure homes, such as a minimum down payment being required on the day of the sale, as well as a maximum number of days allowed before payment in full is required.
Bargains Can Be Had On Unseen Property
In some instances, companies looking to buy government foreclosure homes do not always visit the property before the sale. Although the sales are required to be advertised at least 30 days in advance of the auction, there are companies that send a local real estate agent to bid at the auction on their behalf. They may make their high bid known to the agent, allowing the agent to use their best judgment as to the value of the property and if bidding on the home will end up being a good investment.
Caution needs to be used when looking for resources for homes under government foreclosure. All of the properties pending sale are listed by the government agencies that have foreclosed on the property. However, there are some companies that compile these different lists into one document and sell this list to the potential buyers of government foreclosure properties.
The problem with some of these government foreclosure property lists is that they are often out of date by the time the buyer receives them and rarely do they offer updates free, or at a reduced charge.
