Repossessed Homes

By repossessed homes are meant those residential units that have been taken over or repossessed by the lenders - mainly the banks, after the failure to find suitable sellers at the auction. Repossessed homes are the final part of the foreclosure process.

In USA the foreclosure laws vary from state to state. In the states that allow for judicial foreclosure the process might run up to a year. But in those states that opt for non-judicial foreclosure the game of foreclosure might be over in four months. When the borrower defaults then the lender forecloses. Invariably these foreclosures end up in auctions. But there are so many foreclosed units that buyers are difficult to find. When the houses are not sold they become repossessed homes of the banks. In some of the worst foreclosure hit states a house is repossessed after failing to be sold at auctions at the rate of one house per minute!

In some cases the houses are not vacant - either the owners or tenants of the previous owners continue to occupy these repossessed homes. The bank has to evict them with the help of the law. But before going the occupants often vent their frustration on the building and damage them sometimes beyond repair. Unless a house is vacant the banks face even more difficulty in selling it. So sometimes they offer cash to the occupants on condition they leave the premises in good condition.

The banks are offering huge discounts to sell the repossessed homes. For house hunters it is a good opportunity to pick up bargains from among the repossessed homes as these are in relatively good condition in comparison to the foreclosed units. The repossessed home are free from liens. This means all the creditors have been paid and taxes cleared. The buyer also gets the chance to inspect the house thoroughly.

The banks are offering free bus tours for potential buyers to see for themselves the houses of their choice in a particular area. The government is offering tax benefits to buyers. However the buyers could do well to take the help of professionals to assess the value of the house and also the repairs to be done to these repossessed homes. Often the repair work undertaken by the banks is only cosmetic and superficial.

The banks are collapsing because of the weight of these non-productive repossessed homes. After spending dollars and energy on foreclosure they have now to put in more money and time to spruce up these units to attract buyers. With more foreclosures rushing into the market more banks are collapsing.

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