Finance
Home Foreclosures Can Lead to Big Profits
If you know of a home that is about to be foreclosed you could conceivably step in before the court ruling and buy the home. If you time everything just right and you come up with a competitive price, you could make tens of thousands of dollars on the purchase and later sale of that home. Let?s take a look at ways you can turn someone else?s misfortune around to your advantage.
Let?s face it: not everyone who owns a home has the wherewithal to pay off their loan. Divorce, job loss, bad financial decisions and the like all can play a part in a home going into foreclosure. Fortunately for the homeowner they sometimes sell the home before things get really bad. If that is the case, then the homeowner could get out from underneath an important debt relatively unscathed.
In many other situations a homeowner may wait a long time before taking action. Their delay can ultimately affect their chances of getting out from underneath this debt. By the time such a homeowner considers taking action, a foreclosure notice could have been served by the local sheriff?s office.
Although it may be too late for the homeowner, it could be ?just in time? for you.
Yes, if you are aware of the pending judgment against the homeowner you may be able to step in with an offer that is well below market rate but still acceptable to the mortgage holder. For example, if the home is valued at $309,000 and the owner still owes $260,000 on his mortgage, any amount offered just above the outstanding mortgage amount would likely be acceptable to the mortgage company. You see, they are more concerned with getting their original investment back and they know that your offer may be the only one that keeps the current homeowner from forfeiting the home. If the homeowner agrees to your price, you could purchase the home and the proceeds from the sale would pay off the previous owner?s mortgage.
So, if your offer of $268,000 is accepted you now own a home that has been valued at $309,000. Naturally, if the home sold for a lot less than its worth it could have some problems. You may have to pour ten or twenty thousand dollars into the home in order to make it market ready. In that case you could possibly get much more than the $309,000 price.
Jeff Lakie is a freelance finance writer, His website The Foreclosure List Guide is a great place to find out more about free foreclosure listings. Visit his site today and find out more. |
Jeff Lakie
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