Foreclosed Property – Why people are buying these cheaper properties
If you’ve been researching “property investing” or “buying a home” or “property for your family”, you might have stumbled on Foreclosed Properties and wondered what it is. Properties are considered foreclosed property when a lender, like banks or Pag-Ibig, get the property from the property owner (borrower) who fails to pay their amortizations or defaulted their mortgages. When you loan property or borrow money from the bank or Pag-ibig to purchase a property, the owner of the property is technically the bank (or Pag-ibig). You as the purchaser is a borrower. The only time, you can claim it yours is when you already fully paid the borrowed money. Thus, the bank (or Pag-ibig) will sell the foreclosed home for slightly less than it might be worth to get their investment back.
Is it true that foreclosed properties are cheaper?
Foreclosed properties is sold below the market value because the bank is motivated to get the property sold and would negotiate more than a seller would. If you happen to find a foreclosed property in a subdivision, you can be sure that the foreclosed property is cheaper than the newly built unit or ready to occupy unit in the subdivision.
Why is a foreclosed property cheaper?
The seller of the property is the lender: bank or Pag-Ibig. These lenders are selling the property to get their investments back. They are not after the profit but more of the sale or disposal of the property. And since the property has been used, the conditions are not at par with the newly constructed units or homes. These can not be sold at the same price as those newly built ones. The more run down the property is, the more likely it is sold for less.
How do I find foreclosed properties in the area or city I want?
The Banks or Pag-ibig usually post their foreclosed property listings available online on their websites. Just to be sure, you can visit the bank or Pag-Ibig and check their foreclosed property listings. You can also find Foreclosure Properties in the Philippines is real estate listings like Filipino Homes.
Who owns the foreclosed property?
Once the property is foreclosed, the bank or Pag-Ibig is the absolute owner of the property. In some cases, previous owners still live in the foreclosed property. They will be notified to peacefully vacate and remove their belongings in the property within a grace period. It is highly recommended before you purchase a foreclosed property, that you check if the previous owners are still there. Preferably, choose the properties that are not being used by the previous owners anymore.
Why should I consider foreclosed property in my next property investment move?
The more run-down the property is, the cheaper it is sold in the market. Most people who have the intention to buy the property as an investment is to buy a run-down foreclosed property. They do this so they can buy it for less and reconstruct or renovate the property after buying it. Renovating the property will give you an increase in the property value. Then you can have it rented or sold for a higher price or their current market value. Definitely higher than what you bought it for.
A founding member and blogger of Filipino Homes. Lai Marie is a digital creative sharing helpful and useful travel tips at Pinay Travelista and sharing life hacks and stories on her You Tube channel.