There are a few government agencies that can become owners of private homes for a variety of reasons. In the past, real estate investors often looked at homes acquired through government as a good buys. Mortgages insured by the Veteran Administration or the FHA that wind up in default are often the subject of government and are sold through public auction. Other types of can be due to IRS sales, homes being sold due to unpaid real estate taxes, sales by the Small Business Administration, and homes confiscated because of illegal activities such as drug raids. That is to name a few.
People whose homes or businesses are threatened to be taken through government usually have up to the final day of the public auction to make the necessary payment and save their home. In most instances, the entire balance of the note will have to be paid in order to save ownership, but in some cases it may be possible for the owner to find another lender willing to take a chance on a new loan. However, when the property cannot be redeemed and is lost to foreclosure, the normal process allows the first bid at an auction for government to be two-thirds of the appraised value.
There are a few rules when buying government homes, such as a minimum down payment being required on the day of the sale, as well as a maximum number of days allowed before payment in full is required.
Bargains On Unseen Property
In some instances, companies looking to buy government homes do not always visit the property before the sale. Although the sales are required to be advertised at least 30 days in advance of the auction, there are companies that send a local real estate agent to bid at the auction on their behalf. They may make their high bid known to the agent, allowing the agent to use his or her best judgment and discretion as to the value of the property and whether or not the final bidding on the home will end up being a good investment for the new owners.
Caution needs to be used when looking for resources and lists for homes under government foreclosure. All of the properties pending sale are listed by the government agencies that have foreclosed on the property. However, typical of dealings with our government, there are some companies that compile these different lists into one document and sell this list to the potential buyers of government properties.
The problem with some of these government property lists is that they are often out of date by the time the potential buyer receives them and rarely do these lists offer updates free, or even a reduced charge or fee for the update. Use caution and verify any list you get or pay for.
