The foreclosure process is heartbreaking for millions of families across America. Whether the cause is from losing a job or simply purchasing a house they couldn’t afford, no one wants to see families lose their home; yet in 2010 over 2.8 million homes had foreclosure filings.
What’s the affect of these properties sitting empty?
Banks that are left with these empty properties lose money every month since no mortgage payments are received. Likewise, empty homes in neighborhoods can cause the other property values to decrease, causing strife for neighbors who might want or need to move. And empty homes can lead to vandalism and/or other natural property damage simply because no one is around to take care of problems.
First time homeowners, savvy investors or business owners can make a nice profit from purchasing foreclosed homes because they are often sold at very low bargain prices. Banks figure that offering a low price to entice a buyer is better than a home sitting empty, possibly for years, before a qualified buyer comes along.
Auctions are a quick and profitable way for these foreclosed properties to get sold quickly. Foreclosed properties can include single family homes, condos, or even multi-unit buildings or commercial properties. No one is exempt from the foreclosure possibility.
Each auction house will run their auctions differently but many will require attendees to pay a small admission or registration fee. This will get them a bidding number and also weeds out those who aren’t serious from those who are serious about buying.
The auction house themselves will earn a small percentage of each property sold and the buyers are usually required to have a bank check ready along with a pre-approval letter from a mortgage lender.
Once the sale is complete, the new owner can get to work on refinishing their property and either getting it on the market or turning it into a rental property. With so much anxiety about buying a house and the troubles still apparent in the mortgage industry, renting is an option many adults are pursuing until the economy strengthens some more.
Even though the foreclosure process is scary and sad for homeowners, there are other benefits to selling the property at auction. With more investors looking to become landlords and wanting to make a profit, the property auctions should continue to be profitable this year.
In addition to letting the property sit on the books, banks also have to pay taxes and maintenance fees which erodes their profit margin. Use that to your advantage.