Foreclosures can often represent a great investment in real estate and are a good way to gain equity fast if the market is stable or on an upward swing. Although Foreclosures can be a great deal they are not for everyone. The process is different from that of a more traditional MLS listing as there are rules and laws that surround foreclosure sales that must be met.
If you are not up for the stress of making an offer and then having a court date set where other potential bidders are able to steal the deal from you then buying a foreclosure is not for you. If you need a bit more certainly in your real estate transaction then a more traditional purchase is probably best. But if you are able to handle the uncertainty and don’t have hard and fast dates that need to be adhered to then a Foreclosure could not only save you a great deal of money in the long run, but also be a great investment short term.
As mortgage brokers we at Harmony Mortgage Group understand the Foreclosure Mortgage requirements and because we know that a foreclosure may go for a bit higher at auction, suggest that your qualifying mortgage be a bit higher than your bank accepted offer so that you have the ability to up your offer if need be during the court auction.
Why do we do this? Often purchasers will make a lower offer to the bank (or lender) in hopes that the court auction will be unsuccessful in finding a higher bidder and then the lender is forced to take the accepted offer. But if another party – or perhaps several parties are also interested in the property then the bidding process starts and the highest bidder will prevail.
Why present an offer at all then? All bidders must be pre-qualified prior to bidding. So the lender must have an accepted offer from each individual who is interested in the property. Court dates are costly and if unqualified buyers were to out bid others and then not be able to come up with the financing, the deal would fall through and the lender would be out even more money on their already foreclosed on property.
Harmony Mortgage Group has facilitated financing for many clients that have chosen this non-traditional mortgage transaction successfully. We understand the financial aspect of qualifying for a mortgage of this type of property and can guide you through the process. We work with highly qualified people that specialize in this type of real estate purchase, like Kelly Johnston at Sutton Show Place Realty right here in Chilliwack. With a team of professionals on your side it is much easier to be the successful bidder once you have decided on a foreclosure property.
Harmony Mortgage Group is home to Chilliwack’s Top Mortgage Brokers.