The mortgage auctions are legal processes in which the banks auction a property because the owner was sued for not paying the mortgage; for this reason they often put properties for sale at deeply discounted prices.
However, although financial institutions can offer a home with downgrades ranging from 30 to 60 percent of the actual sale price, making these types of acquisitions has its risk.
For this reason, before buying at a foreclosure, we share some tips that could help you make a good investment.
Tips for Buying at a Mortgage Auction
1. A bank auction is not for those looking for a place to live
These types of transactions are usually much more beneficial for people who are not looking to buy a property to inhabit it, but for people who have previously carried out property purchase and sale operations and seek to invest in a property to generate a profit.
Photo: Piqsels
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2. You must be patient
The time that an auction process can last ranges from six months, in the best case, up to two years, since you must remember that you are acquiring a property that is subject to a judicial process.
In addition, once this time has passed, you should consider that you will not have liquidity until some time later, because in the case of renting it will be much longer before you see the return on your investment.
3. Find a good team of legal representatives
Try to get a good team of lawyers and a notary to represent you legally, so that they are the ones who estimate how much is owed for water, property, liens or any other pending that the property has, but above all so that perform the property appraisal.
4. Take the risk into account
There is the possibility that during the process some mistake is made and the authority fails in favor of the owner, which would cause the investor to lose the property, so it is considered a better option for the process to be initiated by a bank or an institution financial
5. Take into account additional expenses
It is necessary to take into account that a new deed must be generated, and even possession must be taken without the auction being resolved or the property granted. Hundreds of thousands of pesos or millions of pesos are then spent to buy real estate by this means, and these additional expenses must also be incurred.
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