The term foreclosure doesn’t come with many positive connotations. Generally speaking, the land of real estate can have a significant impact on your bottom line. Whether you are in danger of undergoing foreclosure or are considering purchasing a foreclosed property, it is vital to know everything you can about foreclosure.
What is Foreclosure?
Foreclosed property is property that belongs to a bank. These properties occur when the borrower doesn’t pay their mortgage for an extended period of time. There are several common things that lead to foreclosure. These include:
- Loss of job
- Job transfer to a new location
- Inability to work due to a medical condition
- Maintenance issues that the borrower can no longer afford
- Divorce or other conflict with a co-owner
- Excessive debt
Buying a Foreclosed Property
Buying a foreclosed property can get you a great deal on real estate. Banks tend to sell foreclosed properties in bulk or at an auction. Less frequently, banks use a real estate agent to list a property. In these situations, the bank’s real estate agent is typically the only agent involved. Buying a foreclosed property requires a significant amount of research in order to avoid extensive expenses for repairs or outstanding liens. Foreclosed properties tend to have very little room for negotiation and are usually sold “as-is.”
Don’t fret if you’re a few days late on your mortgage payment. Most lenders will allow a 15-day grace period. However, when you miss mortgage payments for longer than 90 days, it can become a serious problem. The property will likely go into pre-foreclosure and the situation must be rectified immediately. Undergoing foreclosure will significantly impact your credit score and can cause a snowball effect of negative consequences.
Foreclosure laws and proceedings vary from state to state. Though real estate agents are invaluable throughout any real estate process, they don’t have the same legal knowledge as a lawyer. Whether you are undergoing foreclosure or looking to purchase foreclosed property, it is highly recommended that you consult with a knowledgeable foreclosure lawyer. To obtain quality legal counsel, contact us at LeBaron & Jensen today!