Understanding Foreclosure Basics
The upside to foreclosures would be that the shrewd investor would be able to capitalize on this type of property procurement and the seller who is in dire straits will be able to get rid of the property fairly quickly so that no further debts are incurred.
As for the downside, it is obvious that the property is already undergoing some problems financially thus there is no question about the possible risks involved which in this case could be comparatively higher.
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The three types of foreclosures would be as listed below:
Pre-foreclosures are at the stage where the investor is likely to be able to relieve the distressed homeowner of any further dealings with the property in question. Here the property owner’s credit rating can be saved from further damage when the transaction to take over the property commences.
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Foreclosure stage is where the property position has already reached dire conditions thus gaining the attention of the courts. After judiciary interception, the property is now ready to be auctioned off to the highest bidder. These bids are characteristically much lower than the actual market value of the property as the financier is basically only interested in getting back the initial investment plus interests incurred.
Post-foreclosure is basically the very last stage where the lender has already taken control of the property. This is o course very distressing for the home owner but there is now no longer any form of recourse or possibility of avoiding a poor credit rating beside the obvious loss of property.