Tips for Buying Foreclosed Properties

Written by  Published January 19, 2012 FOXBusiness

As banks begin to process their housing backlog, experts are expecting a wave  of foreclosures  to rock the already shaky real-estate market this year. Coupled with low  interest rates, this could be a great opportunity for homebuyers to pick up a  home or investment property at a bargain.

According to RealtyTrac, 31% of sales nationwide are of homes in  pre-foreclosure or already bank owned—giving buyers many purchasing options if  they do their homework. In 2011, real estate prices were flat, with the average  price of a single-family home $169,500 in the third quarter, and $167,600 for  condos and co-ops–up to a 20% discount from 2008 prices, with quarterly sales  at 4.88 million, according to the National  Association of Realtors.

Each state has a different timeline for the foreclosure process, and buyers  have opportunities to purchase a pre-foreclosure or foreclosed (real estate  owned (REO) or bank-owned) home during different parts of the process.

Prior to foreclosure, some homeowners choose to do a “short sale,” which is  when the lender agrees to accept a payoff of less than the balance due on the  loan.

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