New York City real estate may have seen a increase in foreclosure filings since January 2009, but when compared to December of last year, the numbers decreased. Economic powerhouses are hoping the trend will continue, but buyers have to understand the process of banking on a foreclosed home.
The foreclosure process for NYC real estate properties can end in different ways. A home loan can be reinstated by a borrower or owner by paying off the default amount owed during a grace period, called pre-foreclosure, which is actually given by state law. While the pre-foreclosure period is in effect, the borrower or owner can sell the property to a third party. Another type of foreclosure is when a lender, through an agreement or by buying the ailing property from auction, takes over the property with plans to resell it.
A buyer banks off this process when they find foreclosure discounts from 30 to 40 percent if they are able to make a buy-out offer outright. The best, and sometimes, riskiest way of doing this is at a public auction where buyers might not have the ability to get in-depth info on the property, but find they manage to save money and avoid the hassles of dealing with unpredictable borrowers or owners.
When mortgage lenders acquire properties, thus becoming bank-owned or REOs, they generally want to re-sell it as soon as possible to make their money back. Bargains for these types of foreclosures may not be as beneficial as the above mentioned, but every little bit helps, especially in areas such as New York where real estate is ranked number 6 in the world for most expensive homes and the average price per square foot in New York City is $1,078.
Before jumping in head first, visit Realtytrac to find a list of foreclosed homes and more info about what the houses around a similar area are selling for. According to Trulia "There are currently 8,794 resale and new homes in New York on Trulia, including 588 open houses, as well as 367 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process."
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