If you try to purchase a home in the foreclosure process, it’s important to know the value of a foreclosure property before you make an offer. If you have reasonable knowledge of the property values in an area where the foreclosure property is located, you probably won’t need to hire an appraiser. But if you’re not sure about the local property values, an experienced appraiser can help you save a lot of money and avoid homes where the outstanding loan balance is actually higher than the current market value of a property.
When the real estate market is soft and prices are dropping, it’s not unusual to come across properties that are financed for more than it is currently worth. Plus, some lenders permit individuals to borrow up to 125% of the value of a home, so the outstanding mortgage balance ends up being more than the value of a home.
Don’t automatically believe a home is worth what a lender is asking for. By the time you add up all legal costs, past due payments, interest, foreclosure legal fees, and other administrative fees to the outstanding loan balance, the amount may be much more than the market value of the property. Check with local Fullerton Realtors to determine what a property is worth before bidding on one.
