Investing in Foreclosed Properties ~ Pinoy Reviews

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Thursday, July 31, 2008

Investing in Foreclosed Properties

If there’s one good thing brought about by any real estate crisis, it’s the fact that anyone can have now own affordable homes. Foreclosed homes are much cheaper than new ones and though it’s really not nice to profit from other people’s misfortunes, it’s true what they say, one man’s lost is another man’s gain. Though they are relatively cheap, there is some caveat that comes with buying real estate foreclosures: it’s the fact that the previous owners can still buy them from you.

Foreclosures happen when a person fails to pay their mortgage debt. The bank or other financing companies foreclose this real estate either judicially or extra-judicially and most often than not, they’re also the ones who are able to buy back the property at a cheaper price (usually the amount of the unpaid mortgage balance). The bank or financial institution then sells these properties and thus they’re called foreclosed properties. The person whose homes are foreclosed is usually given one year to redeem or buy back their homes. When you buy foreclosed properties from banks, these properties are usually unredeemable since owners most probably failed to redeem the property and thus the banks becomes the real owners, thus more safer. Buying homes just undergoing foreclosure proceedings or at an auction is not a good idea since there’s a good chance that the previous owners can buy back the property any time soon. Though they would compensate your for interest, it’s usually minimal.

The site delves into real estate investing through foreclosures which is a good idea if you’re in the United States where Real Estate can fluctuate upwards once their present economic crisis subsides. Investing in real estate is a bit tricky and comes with a risk as with any investments.