If you’re contemplating between purchasing Anaheim Hills real estate-homes for sale in short sale or foreclosure, you’ll find the foreclosure option a more challenging one. A foreclosure occurs when the lender decides to execute their legal right to force the sale of a home when the owner defaults on their loan payments. In today’s upside down bank and mortgage industry, you’ll find a surge in the number of foreclosures hitting the market – creating new opportunities for homebuyers searching for an Anaheim Hills real estate bargain. All communities, from the high end luxury Anaheim Hills homes for sale down to the most inexpensive ones, are susceptible to foreclosure.
When a homeowner defaults on their mortgage, the lender will offer a grace period before they begin foreclosure proceedings. If a homeowner can’t cure the default within the grace period, the bank will take steps to foreclose on the home – which creates great opportunities for new homebuyers during the pre-foreclosure, public sale or auction, and when the property reverts back to the bank (called real-estate-owned, or REO).
The primary advantage in purchasing Anaheim Hills real estate-homes for sale in foreclosure is the low purchase price no mater which stage of the process you decide to buy at. Here are some main disadvantages of buying a property in foreclosure:
1) Minimum Buyer Protection – Unlike a normal homebuying transaction, a foreclosure process will force you to sacrifice some homebuying protection. For example, you may not get the opportunity to inspect a home before you buy it and have to forgo any protection from title insurance.
2) State Laws Protecting Homeowners – Laws have been enacted in most states protecting homeowners in default with their home loan from being unfairly foreclosed on. As a buyer, that means you’ll be facing deadlines, delays, court orders, and an unpredictable outcome – primarily in those states that permit the homeowner to “redeem” or purchase back the house after the foreclosure proceedings (usually between 10 days to one year). If this should happen, your money will be paid back. You have to decide if you really want to be left hanging, unclear whether you’ll be able to live in the house.
3) Professional Competition – Word gets out when there’s a great real estate deal so expect to see plenty of investors trying to bid on a property.
4) Unknown Risks – Homeowners in foreclosure typically suffer through financial hardship for a while. They’ve probably cut back on maintenance, fallen behind on taxes, or put the home up as collateral for other debts.
Now that you’re more informed about the foreclosure process, you need to decide if this is the route you want to take. If you do, be sure to hire a professional Realtor who has experience with these properties. If you want to still use a regular real estate agent, just make sure you define each agent’s role. Also consider using the services of a real estate attorney to guide you through the process.
For more information on Anaheim Hills real estate-homes for sale, give me a call today!
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