A friend of mine in California bought a beautiful home this year and got a great deal because it was a foreclosure. There are definitely real estate deals available for those willing to go this route, but it’s not the easiest way to buy property. According to RealtyTrac, US foreclosures hit another record high in July with 360,149 homes filing for foreclosure within that 30 day period. Nevada ranks the highest in the number of foreclosures, despite a new law that now requires lenders to offer mediation to homeowners that are facing losing their homes. California, Arizona and Florida rank second, third and fourth behind Nevada. Here is a list of all state foreclosure records if you want to see how your state stacks up. July was the third time in five months where a new record was set in property foreclosures, according to RealtyTrac.
If you’re interested in buying one of the millions of homes in foreclosure right now, it’s best to contact your real estate agent and have them walk you through the process. Often the lender wants to recover the amount of the loan which means you could buy a property at a 10 or 20 percent discount. However, the owners of many of the properties being foreclosed on did not have much equity in the property. That means the discount could be relatively low. Wondering where the best discounts are? Check out this article in Business Week that lists the biggest cities with the most discounted homes.
If the home is in pre-foreclosure, you may decide to contact the owner directly and make an offer on the home. This would limit the damage to the owner’s credit report and it would give you an opportunity to get a great price on a home, making it a win-win situation. If the home is already in foreclosure, you will likely have to deal with the bank if it is a bank-owned property. As with any home, you will want to have the home thoroughly inspected before making an offer to make sure it really is the great deal you believe it is.