Looking for cheap homes for sale? You won't have to look very far. Drive through any metropolitan or suburban community and you are certain to see multiple "For Sale" signs. Some homes are offered as "For Sale by Owner" (FSBO), while others are listed through Realtors. Numerous properties are being sold by homeowners offering seller-carry-back financing and rent-to-own houses. Several of the cheap homes for sale are bank owned or foreclosure houses.
Not all properties on the market are cheap homes for sale. However, a large percentage of properties listed are priced significantly below market value. Homeowners facing foreclosure oftentimes need to sell their homes quickly. If they have built-up equity in their real estate, they may be in a position to accept less than is owed on the mortgage note.
This type of real estate transaction is known as a short sale. Borrowers must obtain approval from their lender to engage in short sales. In the past, banks would agree to short sale offers if the homeowner had a buyer lined up. With the recently proposed mortgage bail-out package, lenders are less likely to engage in short sale transactions today.
However, if you are fortunate enough to obtain short sale properties, they usually are a smart investment. Mortgage lenders want their money and prefer not to deal with the headaches of managing distressed properties. If lenders can avoid foreclosure and obtain the amount they desire, chances are they will at least entertain your offer.
Many foreclosure homes fall into the category of cheap homes for sale. Unfortunately, there are millions of foreclosed properties sitting vacant across the entire USA. Most are in need of repairs or renovations. Although there are good deals to be found through foreclosure auctions, a better place to seek out cheap houses is through real estate owned (REO) properties.
REO properties are foreclosure homes that didn't sell at auction. When foreclosure properties are returned to the bank, they no longer have a mortgage. Instead the bank owns the real estate and is responsible for maintaining it.
Most banks work with real estate agents or private investors to sell their REO properties. However, they will also work with individuals interested in buying bank owned homes as their primary residence or as investment property.
Bank owned homes are oftentimes listed on lenders websites. As more Americans lose their homes to foreclosure, banks will eventually be forced to liquidate REO properties for pennies on the dollar.
Currently, bank owned homes are priced at or slightly below market value. Since REO homes were once foreclosure homes, chances are high the house will require repairs and upgrades. While it may appear to be a cheap home, it could potentially be a money pit. Make certain to engage in due diligence prior to making offers on bank owned properties.
A lesser known, but better way to locate cheap homes for sale is through searching probate records. When a person dies, all of their assets and personal belongings are transferred to probate. Beneficiaries are unable to receive distribution until a probate judge authenticates the decedent's Will and concludes the estate has been appropriately managed.
In the best of circumstances, probate typically takes six months to settle. If the decedent died intestate (without a Will) or if family disputes arise, assets can be retained in probate for years. During this time, the estate administrator is responsible for overseeing the estate.
In cases where the decedent owned real estate the Administrator must continue making mortgage payments and property taxes, as well as maintaining the property. This can place a heavy financial burden on the estate.
By probing probate records, you can locate estates with real estate holdings. Wills are public record and contain a goldmine of information. Seek out estates valued over $150,000 which are administered by executors who reside out of town. Doing so will help you locate multiple cheap homes for sale and save you the headaches of dealing with mortgage lenders and banks.
Once probate estates with real estate holdings are located, it is simply a matter of contacting the estate administrator and negotiating a deal. While there are no special requirements for purchasing probate real estate, it is essential to be respectful when making contact and offer your condolences.
Many estate executors do not realize they can sell probate properties. By offering them a reasonable price for their real estate, you can eliminate financial burdens from the estate and purchase properties well under market value.