Repossessed homes provide some of the greatest wealth building opportunities in real estate. With an ever increasing inventory of repossessed homes on the market, lenders, banks and government agencies are unloading foreclosure property nationwide. The secret to the wealth building of foreclosed homes lies in the ability to purchase them well under market value. In the past, finding repossessed homes was a challenge for the average buyer, resulting in most properties going to those with inside connections. However, like with everything in life, the internet has changed everything.
Repossessed homes, also knows as foreclosures, bank owned or real estate owned (REO) homes are those homes that have gone fully through the foreclosure process and have been seized by the lender as a result of the former homeowner defaulting on their mortgage. Very often these homes end up being sold at auction with the lender being willing to take much less than market value since banks prefer to be in the business of lending rather than owning and maintaining property.
Though repossessed homes can often be had for deep discounts to their market value, there are some caveats. Most often, repo homes are sold "as is" with no warranty of any kind. In addition, the previous owners often stop taking care of the property once they know the home is going to be repossessed. As a result, there can be a lot repairs that need to be made. You should be sure to make arrangements to inspect any repo property you intend to purchase so that you are well aware of any potential repairs that may be needed.
As the economy continues to struggle, repossessions are rising. Homes that were normally sold at courthouse auctions are now not getting bids and are being returned to the lender. Tight credit is also contributing to the problem as many prospective home buyers are finding it difficult to qualify for loans. All of this adds up to more and more inventory of repossessed property and with lower demand, that means lower prices for you.
The best way to go about finding repossessed homes is to use an online foreclosure listing service. The best services allow you to setup email alerts that send you an email the second a repo property becomes available. You can then be the first to contact the bank directly to negotiate a quick purchase before any other buyers step in to bid the price up. However, be sure to be pre-approved when you contact the bank, as the ability to close fast can be a huge asset in cases where you might be up against multiple bids.
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