With the recent mess involving robo-signing, buying foreclosures has just become more difficult for the average homebuyer.
If you are a buyer who is interested in foreclosures,
you might find it a bit more difficult to buy one these days, an effect of the robo-signing fiasco that has intrigued the housing market these past several weeks.
The robo-signing mess, which allegedly involved banks speeding up foreclosure proceedings through improper paperwork, had led many institutions to declare a halt on foreclosure sales, causing a drastic cut in the supply of available properties.
In fact, South Florida had already experience a slump in REO properties sales, dropping by at least 20 percent, September and mid-October figures reveal.
Condo Vultures expect a continued sales inactivity unless the moratorium is lifted.
But buyers can still actually find a lot of good foreclosure bargains if they look hard enough. It’s said that REO properties remain the safest to buy as long as buyers do their homework on their titles and insurance.
For those who are deeply interested in acquiring good deals in foreclosures, experts suggest that buyers consider pre-foreclosure sales and auctions. Pre-foreclosures refer to those properties that are actually in foreclosures process already, but are their owners choose to sell them ahead in order to avoid a foreclosure, which could hurt their credit score.
Buying pre-foreclosures will allow the buyer to negotiate directly with the owner, but this could be a long and tedious process. The upside, however, is that buyers could actually inspect the house even before the purchase, a very important step in ensuring that an investment is wise and safe.
While properties at pre-foreclosures could fetch higher price tags than properties at other stages of foreclosures, auction foreclosures can yield lower prices. The downside, however, is that properties at this stage are most likely unavailable for property inspections, which could cause higher cost in the long run if later on, the property turns out to be in need of extreme and difficult repairs.
Moreover, foreclosures of this type are of very limited supply, because of the moratorium, but banks have already indicated that this glut would be cleared up soon once the re-filing of foreclosure documents is completed.
Repossessed houses are also great alternatives for homebuyers and they can almost always be inspected even prior to closing deals. These properties are also regarded as one of the safest buys since they typically come with clear titles.
However, the robo-signing controversy may have clouded the integrity of thousands of foreclosures and many are raising ownership and legal issues over the same. On the other hand, banks may be willing to shoulder repair costs and others in order to liquidate the properties.
Of course, the most important thing that a homebuyer should remember is to always inspect the property since this will afford the buyer a critical means to ensure that an investment is worth its price tag.
