New York is a judicial foreclosure state, meaning that a lender has the right to file a lawsuit to foreclose on a real estate property if the borrower fails to meet the conditions set by the mortgage and note. If the court rules in the lender’s favor, they may obtain a judgment to sell the property at an auction. This is where you may step into the picture, since if you win the auction, the money you dish out may be used to repay the borrower’s outstanding debt to the lender. Before entering such an auction, though, please continue reading to learn what to know before buying a house in foreclosure and how an experienced New York City purchase & sale attorney at Zimmet Law Group, P.C., can help you make a decision well worth it.
How do I find a foreclosed home that is for sale?
You may be interested in hunting for a foreclosed home because it will likely be priced significantly lower than comparable properties in the neighboring area. This is because, if a seller is in pre-foreclosure, they may not have enough time to wait for a competitive offer. Or, if the property is already seized, the sheriff’s office or bank likely does not want the burden of holding onto it for much longer. Nonetheless, to find a foreclosed home for sale, you may use any of the following resources:
- Real estate websites, financial institution websites, local bank offices, or local newspapers.
- Local multiple listing services with foreclosure details within their property descriptions.
- Real estate brokers, real estate agents, and real estate attorneys with insider information.
What should I know before buying a house in foreclosure in New York?
Even though foreclosed homes have a reputation for being sold under market value, you must understand that there may be hidden costs associated with this transaction. That is, this property may come with unpaid property taxes, outstanding liens, and even overdue homeowners’ association fees. Here, you may inherit these debts or the bank may pay them off beforehand; even so, they may increase the asking price for the home in compensation. Below are other potential risks you should know before pursuing a foreclosed home:
- This property may be sold “as is” and require significant repairs, as the previous owner, who could not keep up with mortgage payments, likely could not afford its upkeep.
- This property may catch the attention of many outside parties, including investors and professional house flippers, which may increase the chances of a bidding war.
- This property likely requires many additional documents with the banks and court systems before closing, which makes purchasing it a slower process overall.
Before this gets too much, please seek the guidance and counsel of a skilled New York City real estate attorney from Zimmet Law Group, P.C. We will work to the best of our ability to minimize or eliminate this mess from your immediate worry.
