Buying Foreclosures In Westchester
The Opportunities & Challenges of Purchasing Foreclosures In Westchester, NY
The concept of buying foreclosures comes across as one of the best ways to strike a great deal for investors or home buyers. In simple terms, low priced deals on foreclosed property means that an investor or homeowner gets a potential discount when purchasing a home. While this can be true is has become difficult to get substantial discounts and these types of deals come with inherent risks when buying a foreclosure in Westchester, New York.
The Lead Up To a Foreclosure
A home-owner who is unable to pay his or her monthly mortgage payments risks losing their home in foreclosure. In such a scenario, the lender has a legal right to repossess the home and will wish to sell the property in order to recoup the money they may have lost.
The foreclosure process in New York is extremely lengthy and can take two to three years in many instances. While a homeowner is in foreclosure there are a couple of ways to purchase the home and when the bank forecloses and afterwards present other opportunities.
FOUR WAYS TO BUY A FORECLOSURE IN WESTCHESTER, NY
Buying the Note from the Bank
While in some circumstances it may be possible to purchase a note from a bank this is generally difficult to do and then still requires you to foreclose on the property after the purchase. The biggest problem when attempting to do this is being able to reach the right party at the bank. With many banks this is usually not possible and most of the notes that are sold are sold in bundles of hundreds or thousands eliminating the ability of most homeowners or small investors.
The final step in any foreclosure is an auction conducted by the bank. These are generally held in the court house and are listed in local papers. When buying foreclosures in Westchester, NY the auctions are all held in the lobby of the Supreme Court in White Plains. Anyone can attend one of these auctions and try to purchase the home. There are risks with this and the most important one is that you will not have been able to get into the home to see what kind of condition it is in. Additionally, you generally have thirty days to close so financing would probably be an issue so these tend to be cash deals. Finally, the banks set a reserve on the sale and in most instances end up taking back the property to be sold later.
Another way to purchase a foreclosure is as a REO (Real Estate Owned) property. This is after a bank takes a property back after the auction and has it on their books. There are times when the banks will sell these prior to listing them and at times a discount on the actual value may be possible. In any given area and when purchasing a foreclosure in Westchester, NY there are a few brokers that get most of the REO listings from the banks
The last way to purchase a foreclosure is through a short sale. The majority of short sales in New York involve someone that is in foreclosure. While the discounts of a few years ago are behind us it is still possible to get a good deal through a short sale when a home is in foreclosure. This also has potential issues for any buyer with the main one being that it must be approved by the bank and usually takes 4 months to a year to get closed. The bank must approve any price on a short sale and will usually do an appraisal or BPO (Broker Price Opinion) to come up with a value.
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