Have you ever imagined owning a piece of land and building your dream house
on it? Deciding if you want to build near neighbors or not? If so, investing
in land foreclosure property may be the right choice for you.
Land foreclosure is property that was once financed, and due to default
payment of the loan, repossessed by the lender. However, the lender does not
want to sit on the property. The land foreclosure property will be marked
below appraisal value in order to get the property sold quickly. The longer
the lender has possession of the property the more money that will be lost.
The lender will be responsible for any new taxes or old taxes on the
property. Due to these facts the lender wants to get the land foreclosure
sold as quickly as possible. This is a great opportunity for new home buyers
and investors.
There are three types of land foreclosure sales: pre foreclosure,
foreclosure auction, and lender owned sale.
Pre foreclosure means that the process of the land foreclosure has begun but
is not finalized. This gives the original owner a chance to redeem his or
her name with the bank. He or she can do this by either paying the defaulted
amount of the loan or selling the property to pay off the loan. During the
pre foreclosure process, investors and property buyers have a great chance
at getting a significant deal on the pre land foreclosure property. The
owner of the property is facing an ultimate crisis. The owner is on the
verge of losing the property, devastating credit, and other financial
burdens. For this reason he or she will be prepared to accept any help that
is reasonable.
In most cases, an investor can save up to thirty percent off the appraised
value of the pre land foreclosure. Not to mention, the ability to inspect
the land before making an offer. It is in an investor’s best interest to
have financing pre approved before discussing purchase with the property
owner. The property owner may not want to discuss any offers if financing is
not already pre approved.
A foreclosure auction is final process of land foreclosure. The owner no
longer has ownership of the land. Nevertheless, purchasing land from an
auction requires an investor to be educated on the process and experience.
It is not the law, but it is more beneficial to the investor to know what he
or she is doing, and can make the difference between making a profit and
losing money. The down fall to purchasing land at a foreclosure auction is
that the property now cannot be inspected and payment for the land
foreclosure is expected at the time of auction.
Lender owned sale is a different type of land foreclosure sale. The lender
has ownership of the land. The lender will sell the property in a more
formal sale at a lower value in order to take a lower risk. However, an
investor can expect to save at least twenty percent of appraised value on
property. On the other hand, pre foreclosure land or a foreclosure auction
may be the most beneficial route for investing in land foreclosure. Though
anyone can invest in land foreclosure sale, a smart investor is an educated
investor. Do the research and homework before investing.
By Heather Seitz
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