As foreclosure rates continue to rise, homebuyers find themselves in a position to buy desirable properties for less than market value.
Most foreclosures result from a homeowner’s inability to make payments—often due to loss of employment, mounting debt or other financial hardships. It’s a gloomy situation for sure; one that every homeowner hopes to avoid. But for first-time and experienced homebuyers, foreclosures present some unique advantages.
For one, distressed sellers are typically eager to engage in a quick transaction, which can result in a more affordable price—one that is a fraction of the original market value. In addition, when purchasing a foreclosure, buyers can use regular mortgage financing and request a home inspection within a period of standard due diligence. This is the case when buying a property that has foreclosed, referrred to as a REO (real estate owned), as opposed to the more common “cash sale,” which occurs at auction.
Yet, while foreclosures may be rampant across Maui, many prospective buyers don’t know how to access comprehensive listings of these properties. If this seems to be a mystifying process, don’t worry. But, it’s more accessible than many realize.
To find a listing of foreclosures, check out the classifieds section of The Maui News or The Honolulu Star-Advertiser.. You can also find listings online at www.USA-foreclosure.com or www.realtrytrac.com. These sites offer a wealth of information, including listings, trending data, statistics and photographs.
If you are feeling proactive—and have an afternoon to spare—foreclosures are regularly auctioned off to the highest bidder on the steps of the Maui County courthouse at 12 p.m. throughout the week. As a general rule of thumb, qualified bidders must show proof of funds and have a down payment equaling 10 percent of the sale price.
According to Realty Trac, there were nearly 200 new foreclosures in Maui County last month. Before browsing, the site cautions, “You need to find out as much as you can about the estimated market value of the property, how much is owed on the property and if the owner has any other liens against the property.” Keep in mind, you are purchasing a foreclosed property as is. As always, I recommend that you consult with a trusted real estate professional to ensure a smooth process.