All of us wish to have the American dream, a great job, a loving spouse, 2.5 kids, 1 cat, 1 dog and of course, our dream home, but many times we all learn that our dream home is way out of our budget.
If you are a first time buyer of real estate then you are going to learn very quickly that the home you desire will more than likely be out of your price range. The first step you will take is to talk with a realtor, they will need to know all your financial information, then they can give you an idea of what homes you can afford. Do not be shocked when you learn you cannot purchase that 3-bedroom house that you really desire.
You will have to either settle for a home that the realtor explains you can afford or you will have to search for another market in order to purchase your dream home. However, there are other markets out there that will allow you to buy a home below market value that is more of your choosing. The answer to your dilemma is a foreclosure home.
A foreclosure home is not much different from any other home you see on the market except for one huge difference. A home you find on the market that you really desire could be around $250,000 and another home in the same neighborhood with many of the same amenities you might be able to purchase for $125,000. Now, you may be asking, how in the world can I do that? The answer of course is a forclosure home. A foreclosure home is one in which the homeowner has defaulted on their promissory note. All this means is that they cannot pay their mortgage payments to the lending company. When this occurs, the homeowner must either work it out with the bank, file bankruptcy, sell their home, or the home will be taken away from them and sold at public auction for the money they have left on their loan.
Now, all you have to do is find the homeowners and give them a reasonable offer to purchase their home and save their credit rating. Many times, they will accept an offer that will just get them out of debt with a little left over to move. The best way to approach the homeowners is to be sympathetic; they are losing their home. In reality, they may only owe around $50,000 on their home and the bank will want that amount, so anything over this amount they can get will allow them to move into a home they can afford. Even if you bought this home for yourself for $125,000, the market value of the home would still be $250,000 and the homeowners would have something for the money they paid on the home.
