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Purchase a Bank Foreclosure for your Next Investment Opportunity

Jul 29, 2008
A bank foreclosure is also known as a real estate foreclosure and it occurs when a borrower is unable to repay their outstanding debt to the bank. The real estate property was put up for collateral for securing the loan and a lien was put upon the property giving the bank legal right to seize that property should there be a default in payment.

In order to preserve their credit rating, a property owner can attempt to sell their home during thepre foreclosure period. A shrewd investor will realise this and could make a killing

Because homeowners do need to sell quickly, a wise investor can take advantage of a very lucrative deal.

The bank can and will obtain ownership of the real estate property or home, if, during the pre foreclosure period, the property is not yet sold successfully

When a bank foreclosure has occurred the bank will not wish to keep the property that it now owns for several reasons:

Banksare there to lend money and not to become real estate owners

Banks in possesion of properties on their books are seen to have made bad decisions regarding lending money to customers who cannot repay

? Banks lose money on the ownership of repossessed homes. They must maintain the buildings, pay taxes and insurance fees. The longer they own the property the more loss they incur.

Any money lost on a bank foreclosure has to be regained by the bank

Banks do like to get the foreclosed properties of there books as soon as possible, this opens up a very wise investment opprtunity for the shrewd investor. Typically a bank will sell a property at between 20 and 60 percent below the market value of that foreclosed property. Wise investors have the ability to search for bank foreclosures that may fit nicely inside their budgets. If you surf the internet you will find many sites that do provide information on foreclosure homes, commercial foreclosures and very often , government foreclosures also. There is usually a nominal fee provided for this excellent service

A bank foreclosure home or real estate property presents a risk free investment, where there are no liens on the property and the costs involved are way below market value. A wise investor is responsible, purely for the costs involved in the selling of the property.
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