Real estate owned (REO) or foreclosure property can be defined in simple terms! Foreclosure houses will be owned initially by the owner then he might have put that property for mortgage with the lending company like banks or other financial institutions etc. If he cannot pay his mortgage due then the lending company will put up the home for sale for his mortgage payment.
Foreclosure properties will have below market value always! Not true! Actually you have to search for such properties thoroughly because it will be very little in number. In that case you can hire a real estate agent who works directly with the bank that has foreclosed houses for sale.
How to Buy a foreclosure house in New Jersey
You can easily find the foreclosure homes in New Jersey by surfing through the local real estate websites. These websites will have a large database of available homes for sale, filter the available results with foreclosure homes. Take the list of available homes and contact the sellers. REO or real estate owned homes is nothing but the home which has been through the foreclosure process and waiting for sale.
Usually banks hire an agent who will deal with all the foreclosure homes sales. You have to contact those agents and enquire them about the REO properties owned by the banks. In that case you don’t even have to hire a real estate agent since you are dealing with the bank’s agent directly. There is also an advantage that you don’t have to pay the brokerage fees for two agents.
Another major advantage of dealing with the bank’s agent is they have lot of experience with foreclosure sales. They can offer lot of options available with their banks database. Sometimes, even before the listing is ready to be uploaded in database, they can help you with the sale.
Points to remember before buying a foreclosure house in New Jersey
Before pricing the property and writing offers, you have to compare the prices of at least 2 to 3 nearby properties. The comparable near the foreclosure property have to be in same price range with your. This would avoid you buying the overpricing property. Sometimes the banks will sell the properties at auction. The disadvantage of buy a foreclosure house in New Jersey is, for such properties they might demand you to make payments the same day. At such instance you might not be able to inspect the home.
Without inspecting you cannot buy any properties or else it may incur you a great loss. Only after a thorough inspection you can estimate the ARV (After repair value). You cannot expect the discount on foreclosure properties! Many buyers often expect the seller to exclude the cost which is needed for repairs and renovation of home. That doesn’t work that way! If the house has been priced for some amount, you have to pay that which includes a considerable amount of deduction for its repairs and renovations.
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