Could it be? Could foreclosures really help the housing market? It seems like no matter where you look these days, someone is being foreclosed upon, and REO bank foreclosures are for sale everywhere. When viewed from street level, the horizon looks bleak, but a report from Old Dominion University has a different outlook on the curbside blues homebuyers are feeling. According to the study, foreclosed homes for sale may actually put a fire under the housing market again.
No one likes knowing a friend, family member or neighbor is being evicted from their home by a foreclosure. However, foreclosed homes for sale also bring another mindset to those who work hard to make ends meet while still paying their bills. The issue starts with sadness and a feeling like: there but for the grace of God go I, and we empathize with the homeowners facing bank or government foreclosures. It soon turns to a somewhat bitter feeling, though, when you know that a fellow homeowner hasn't paid their mortgage in months, but is still in their home.
Some researchers feel that bitterness turns into a moral hazard, and starts people wondering why they should bother trying so hard to pay their mortgage when they can just stay in their homes for free. That creates an escalating effect that puts more foreclosed homes for sale on the market. The faster HUD foreclosures, or bank foreclosures go into effect, the sooner we will begin to see a decrease in overall delinquencies and foreclosed homes for sale. When you think about it, the reasoning makes perfect sense.
Buy HUD Homes Now and Get the Best Deals
If the reasoning above is true, and foreclosed homes for sale will begin to dry up after banks take more aggressive roles in taking delinquent homes back from homeowners, then now is the time to get the best deals. There are thousands of foreclosed homes for sale on the market at well below the normal price for the areas. While there is some research required before jumping into a home that has been foreclosed on, it isn't as unusual as you might think.
When you buy a foreclosed home for sale you should always get a real estate inspection to see what problems exist from previous owners leaving in a hurry, or lacking funds to care for the property properly. That's true of any home, however, so the ritual isn't different when buying a foreclosed home for sale.
You also need to get a title check to be sure that bank that did the foreclosing is the principle, and only lender on the title. If you make the mistake of buying a foreclosed home for sale without checking, you could end up only paying off the bank that holds one of the loans, and still owing other loans, because you buy them with the title on a foreclosed home for sale. Not different, still: you need to do that on any home you buy. So the reality is, foreclosed homes for sale make great deals, and now is the time to find them.