What is Foreclosure?
Foreclosure is the process by which a lender reclaims a property from a homeowner who has defaulted on their loan.
“A” foreclosure refers to a property that is now owned by the bank. Banks don’t like to hold property. Owning property means keeping up with maintennance, upkeep, utilities, taxes, and etc…and that costs money. Banks like holding liquid money. As a result, they hire realtors to sell off their “foreclosure” properties or “REO” properties. REO stands for Real Estate Owned (as in, by the bank).
Foreclosures are wonderful things for buyers, as the banks are usually very excited to get rid of these properties. As a result they are almost always priced under market value, and if you take your time and are willing to look, you can find some excellent deals.
Remember before all the 100% financing deals and jumbo loans when Cash was King? Well…with foreclosure properties – it absolutely still is (at least in my opinion, and from my experience). Banks are much more willing to negotiate with all-cash deals because they mean no financing contingencies, no lenders that can pull out and kill a deal, and a much lower chance of last-minute problems. Banks want to sell these properties quickly and easily.
That’s not to say that you can’t purchase a foreclosure property if you need a loan…the bank just won’t necessarily be quite as eager to negotiate.
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About the Author
Josh Hanoud is the #1 Top Producing Agent at Tropic Shores Realty in Spring Hill, FL and in the top 3% of all real estate agents in Hernando County, Florida (2007). He also happens to be the co-founder (along with Natalie) of the
Hernando Luxury Homes website which aims to showcase the best properties that Hernando County and the surrounding Nature Coast has to offer. Whether buying, selling, relocating, or investing - Josh & Natalie are proud to offer a higher level of service. Contact them today at 352-397-5182 or Josh@HernandoLuxuryHomes.com to see what they can do for you.
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