Project Stocks

I’m sure you’re aware of the real estate and foreclosure crisis going on in the United States. Because of this, there is an excess of homes on the market. Obviously some properties will be run down in unappealing neighbourhoods as usual, but what’s different this time is the surprisingly increasing number of well kept and even executive style properties that are up for sale for pennies on the dollar.

The timing for researching on a great deal for a new house couldn’t be better then it currently is, but first you should be aware on the pros and cons of purchasing homes through a government auctions as compared to the standard way using a realtor.

The advantages of buying a foreclosed or pre-foreclosed property are:

- The great prices available on foreclosed/pre-foreclosed homes is obviously the number one advantage.

- Many homes are in good condition for much less than their market value.

- Variety and selection is better then it has ever been.

- No realtors or agencies fees to pay (consulting with a real estate savvy person is recommended).

- Some insurances are optional. It could save you hundreds a month.

- Great investment opportunity (i.e. rent out or flip that house)

- Less risky than trading equities in the stock market.

Disadvantages:

- Mortgages may be harder to get (unless you have great credit with your bank).

- Need to be mindful of existing liens or taxes that have not been paid on the property.

The main caution is to properly check that the property is free and clear of any debt ahead of time. Also know in advance when the government auction expects payment for the house and have the loan details worked out with your bank. As with purchasing any house if you have enough cash handy (who does) that makes your profit potential much greater.

Government auctions are being held all around the US and Canada. You can find information about upcoming auctions and pre-foreclosures (homes you can buy before the auction) on the internet along with detailed listings on the homes that will be for sale. Purchasing a home through a government auction can be a very rewarding adventure but doing your research ahead of time will allow you to be prepared. In fact I would recommend attending a few auctions before you are ready to purchase so that you become familiar with that environment.