Foreclosures – When a homeowners’ right to home ownership has been terminated because of the owner’s inability to make mortgage payments. The lender seizes ownership of the home, but it doesn’t happen overnight. The home is typically seized after adjustments have been made in payment plans to allow the homeowner to regain ownership of the home.
Purchasing foreclosures is a great way to invest in real estate because you can purchase a home for as much as 60% off the market value of the property. Because there are so many foreclosure listings on the market today, many people are turning to buying foreclosures as a way of accruing wealth. Usually sold as short sales, REOs, or auction homes.
REOs - Also known as “bank-owned property,” an REO, which stands for “real estate-owned,” is a property that has gone back to the mortgage company after an unsuccessful foreclosure auction. Unsuccessful sales can happen because what is owed to the bank is typically more than what the property is actually worth. Once the bank owns the property, the mortgage loan no longer exists.
If you’re looking to purchase REOs, you’ll be dealing with a bank, typically an entire branch that specializes in REOs. Properties are sold “as is,” so you’ll want to do your homework to property investigate the property. You’ll want to research the values of the homes in the neighborhood. A common mistake with REOs and foreclosures – getting in a bidding war and paying over market value.
Short Sale – A short shale is when the mortgage company or bank reduces the note and you purchase the note from the mortgage company. This essentially comes at a loss to the bank and depends on the amount the bank is willing to accept.
Quick Sale – These are houses that are priced below other houses in the area to sell, just as the name suggests – FAST! But don’t let this fool you. It may be labeled a “quick sale,” but it doesn’t mean the home is automatically lower that comparable homes in the neighborhood. This is why you must do your research.
ROI – Also known as “return on investment,” this is the profit you make after you’ve purchased a foreclosure, short sale, or quick sale below market value, then made upgrades to the home and re-solid at a higher price than the original purchase price, which ideally is at market value or above, depending on whether you’re looking for a long term investment or to flip a home quickly.
Direct Express Realty is a realtor specializing in St Petersburg Foreclosures and REOs. Contact Direct Express to Invest in St Petersburg Foreclosures or for Remodeling Investment Property in St Petersburg.
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