These are the home which has been taken over by the bank, but the bank did have a right to act as an owner of that particular house. These are the homes, which are seized by the bank. These types of properties are not easy to buy directly from a seller. There are two ways to buy the foreclosed home first is a real estate agent and the other one is public auctions.
This situation happens when a seller purchase a home on mortgage and cannot able to pay the mortgage fee due to some reasons which results bank take over the property. The bank has never become the owner of a foreclosed home, the bank only undertakes the property from the seller due to non payment. Public auctions are the open market bidding system in which the higher bidder buys the house at a higher or lower price than the actual price of the house. The other way is a real estate agent. In this case the property agent has an authority to sell the house to those buyers who fulfill the requirement.
Why foreclosed situation happens to seller
There are many reasons when this situation faced by the sellers
- Fired or quit from the job: When a seller depends fully on a salary to pay the mortgage fee of the home. If he fired from the job, then he cannot able to pay the mortgage fee and then bank take over the property
- Incapability to pay the mortgage fee: When a person is unsound mind or medical not fit, then he may not able to pay the monthly or yearly house fee due to which the bank seized the property.
- Excessive debt: If a seller has more outside debts, then he cannot able to pay the bank fee which result closed down the house.
- Quarrel between co-owner: If there are two owners of the property and the agreement will be breached if the Squabbles between the owners. The bank breaches the mortgage agreement and seized the property.
- Transfer of job: As we have discussed above, when a customer fully depends on the salary to pay the bank fee, if the job is transferred to another city or country then it may not possible to pay the mortgage fee.
Ways of Buying a Foreclosed home
There are three common ways to buy a foreclosed home
- Approach to seller
- By Public Auctions
- By Listing real estate agents
Approach to seller
This is the rare case where a buyer direct approach to the seller about the buyer of this foreclosed home. In this way the seller and the buyer directly deals the foreclosed home. The seller has a duty to give every necessary information to the buyer, so, he can decide whether to buy that home or not.
By Public Auctions
Public auctions are the common way to buy mortgage properties from the bank. In this case the highest bidder is the owner of the house, but the bank has a duty to transfer the bidding amount to the seller after charging some commission.
By Listing with Estate Agent
The bank also lists the property to the estate agents where the buyer approach to the agent about the property. The agents charge specific transaction commission’s.