Two big celebrities faced foreclosure this week, as both Ed McMahon and Evander Holyfield joined the more than one million Americans being sucked under by the dive in real estate values.
Since we idolize and fanaticize about the live’s of the rich & famous, is there a financial reality lesson here?
Ed McMahon: Well, if you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen. You want everything to be perfect, but that combination of the economy, I have a little injury, I have a situation. And it all came together.
Pam McMahon: I think over the years, you know, it’s just a kind of a combination of maybe Ed working so hard and not kind of looking at proper management, which happens a lot. … Because you’re a celebrity, people think you have a lot more than you have. And you always want to take great care of all of your friends and your family and everybody, and you do. And you don’t, and I think, you know, we didn’t keep our eye on the ball. We made mistakes.
King: And are they foreclosing?
Pam McMahon: Yes, they are. …
From Larry King.
The Specifics of Buying Foreclosed Homes
With the current sub-prime crisis and the real estate market still somewhat in flux, the opportunity exists for people to take advantage of low prices associated with foreclosures.
It’s certainly unfortunate that foreclosures are increasing. But at the same time, it does present an opportunity for those wanting to invest in houses while the market is poor. An until the housing market comes out of this funk, there should continue to be some great deals out there for people who are willing to take a chance. How do you go about purchasing one of these foreclosed homes, though? What exactly does the process entail? Here is a breakdown of a few of the basics.
Steps in buying a Foreclosed Home
Once you have gone through the process of finding a good deal, there is still an extensive process that must be completed in order for you to own that property. Specifically, buyers have to go through all of the appropriate channels, which tend to be extensive when dealing with foreclosures.
Do I have to attend a foreclosure auction?
Technically, you can get around dealing with a foreclosure auction if your timing is right. If you can get in touch with the homeowner just before the home is returned to the bank, then you could make a deal with them that will allow you to purchase the home at a huge discount.
There is also the option of making an offer directly to the bank. If you can find out exactly when the home is going to be transferred back to the bank, then you can make an offer before the bank puts the house back on the market. This will allow you to get a better deal than what you might get when competing with other buyers. Otherwise, you will have to go through the standard auction process and compete with others for that home.
What’s the auction like?
If you are buying a HUD home or a VA home, then you have to make a sealed offer in order to qualify. HUD homes can only be sold through these written, sealed offers. In order to do this, you must find a real estate agent that is certified to handle this sort of home buying.
For all other bank foreclosed homes, the process will vary depending upon which bank and what sort of home. Banks will generally advertise the foreclosure auction in the newspaper, so you have to be on the lookout in order to know when the auction is going to happen. Then, you will have to attend the auction and be prepared to pay the minimum amount by way of bank check in order to win the home in auction.
What steps should I take?
There is a lot of information floating on the internet about how you can purchase a foreclosed home with terrible credit and no money down. Though it is certainly easier to purchase a foreclosed home than it would be to purchase another type of home, you still need good credit to buy a foreclosed home. In addition, you will be able to get by with a lower down payment, but there are not many homes that will require tiny down payments.
In addition, research is absolutely imperative to your home search. Because auctions are intense in terms of competition, you should take the time to scout out a few houses in order to have a good idea of what youâ€™re looking at once the auction begins. It is in your best interest to enter the actual auction with as much information as possible and you should know how much you are willing to pay for the home in question.
Foreclosure Home Image by Allan Ferguson