Foreclosures Fairbanks AK

The f-word has been making a lot of headlines. In early 2007, more foreclosed properties are on the market than in the last 10 years combined.

Five years ago, lending rates were low and people bought expensive homes they couldn’t afford. Homeowners with adjustable-rate mortgages cashed out equity to pay bills and raise their standard of living.

Now they’re paying for it. Balloon payments are due and over-their-heads borrowers can’t handle them, so their homes are being turned over to the lenders.

"Areas you never would have dreamed would be foreclosures are being slammed right now," says Darrell Gibbs, a South Carolina real estate broker who specializes in auctioning and selling foreclosed homes.

With a glut of potentially desirable property on the market at fire-sale prices, profit-minded entrepreneurs are jumping into “flipping” – buying houses to sell at a profit, either after they make improvements on the property or see them in the market.

The practice is loaded with risk, often ignored for much the same reason the property was foreclosed: eyes widened by a potential killing.

An Insider’s Advice on Buying a Foreclosed Home

New Hampshire investor Skip Stearns has been flipping foreclosed homes for 10 years. Even the house he lives in was a foreclosure.

Most such properties are sold at auction, usually as-is, without the bidder ever getting to walk inside. Stearns says exceptions happen with less than five percent of the houses he buys.

Author: Wendy Grossman

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