When searching for investment property, you will come across many different types properties in real estate listings. Homeowners who have gone into foreclosure or are trying to avoid going into foreclosure generate many of these listings. The main reason why many homeowners go into foreclosure is that they fall behind on their mortgages. Lenders foreclose on the home and try to get some of their money back. Different lenders are the main source for real estate listings.
Real estate listings are accessible through websites that deal with selling residential properties. The lists are also advertised in local newspapers and other local real estate publications. Below are the different types of properties you are going to comes across when you are looking at real estate listings.
To avoid foreclosure, many homeowners may opt to sell their homes at a loss. When they sell their home for a loss, the homeowners are choosing to go through with a short sale. Homeowners choose a short sale to prevent a foreclosure from showing up on a credit report. This option gives them a clean start. Various websites, newspapers and the homeowner’s realtor usually advertise short sales. Short sales may be a good option when buying investment property. The house is usually in fairly good condition. You can also inspect it before buying it. However, lenders must approve the terms of a short sale.
A bank-owned property has gone through a foreclosure process. However, it did not sell at a courthouse auction. After an unsuccessful sale, the lender now officially owns the property. This type of property is also call a real estate owned (REO) property.
These properties are usually listed on lenders websites and through local realtors. They are usually sold “as is.” This means that it is unlikely the lender has made any improvements to a house after the foreclosure process. However, the lender would have taken care of any tax liens and unpaid debt. You can also inspect an REO before buying it.
Lenders will often sell foreclosed properties at courthouse auctions to recover some of their money. At a courthouse auction, the public is invited to bid. The highest bidder is given the opportunity to buy the property. There are some risks to buying a foreclosure at a courthouse auction. First, you usually cannot inspect the property before buying it. Second, the home may have liens and unpaid debt that you may not be aware of unless you conduct a title search. Many states, counties and cities will have foreclosure listings on their websites.
Searching for investment property can be an overwhelming task. After you have found a house in the real estate listings, make sure to do your research to maximize your investment.