by Myrna York
Imagine a 7,900-square-foot lakefront mansion in Las Vegas with six bedrooms, an in ground pool and an illustrious landscape available for purchase at a meager one million dollars. Sound impossible? Not if you look into foreclosure properties for sale. Homes like these million dollar mansions can be found all over the country through local banks after the owners have defaulted on their mortgage. Buying a million dollar or more home that is in the foreclosure process will not only save a great amount of money, but some investors agree that buying a home in foreclosure is a much easier process than a normal home sale. This way there are no prices to haggle over or move in dates to set. When you buy it, it's yours.
With foreclosures running up to 1.27% of all mortgage loans, according to the Mortgage Bankers Association, the best place to look for a million-dollar mansion to buy may be a bank or on the court house steps. In the first five months of 2004, over 113,000 million dollar mansions came onto the market as foreclosures. This is an increase of 37% from the previous year, according to Foreclosure Free Search.
No one can write a best-seller by taking thought. The slightest touch of insincerity blurs its appeal. The writer who keeps his tongue in his cheek, who knows that he is writing for fools and that, therefore, he had better write like a fool, makes a respectable living out of serials and novelettes; but he will never make the vast, the blaring, half a million success. That comes of blended sincerity and vitality.
—Rebecca West (1892–1983)
As interest rates rise, mortgage rates are more likely to inflate, thus putting pressure on financially exhausted homeowners that are barely making ends meet already. More people have been taking out loans that have been more than they could possibly afford, while maintaining a certain lifestyle, or by trying to maintain a certain lifestyle. While the lender will calculate the amount that the borrower should be able to repay, according to the borrowers yearly income, this amount can often be more than the borrower can actually afford.
A million dollar mansion foreclosure can happen to the best of people, in the best neighborhoods, in any price range. These foreclosures can and do occur in the same proportions as do other homes. A million-dollar mansion foreclosure can sometimes be a surprising steal, mostly because some lenders don't want to price their properties to move fast. There are deals out there for those that are patient enough to look for them.
There are also disadvantages of buying a million-dollar foreclosure property as well, because most of these homes come onto the market due to a financial hardship. Sometimes the former owners become bitter from the loss of their home and sabotage the home by damaging or removing doors, appliances or light fixtures. Some of these homeowners may go as far as pouring concrete down the toilets or punching holes into the walls of these million dollar homes. Sometimes the financially strapped homeowners allow the homes to fall into disrepair, because the basic foreclosure can take about four months. This allows ample time for the lawn to become seriously overgrown and a slimy green pool to grow.
I have at last, after several months’ experience, made up my mind that [New York] is a splendid desert—a domed and steepled solitude, where the stranger is lonely in the midst of a million of his race.
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)
There are many ways to buy a million-dollar mansion in foreclosure. On average, at least 10 properties priced $1 million and more, will fall into default every year, but only a fraction of these properties will be sold at auctions. Most of these million dollar mansions are actually sold in a pre-foreclosure sale to buyers who search legal postings for Notices of Default. All buyers will need to be financially prepared to make an offer on the pre-foreclosure home immediately and have the down payment already in hand. These buyers also need to be prepared to deal with the emotional property owners who are losing their homes and who may not want to leave willingly. There may also be furious tenants to evict, which the buyer should be readily prepared to do.
Laws can vary from state to state, but home owners normally have up to four months to pay their debts to avoid foreclosure on their property. If the homeowners can't pay their debt in this time frame, then the lien holder of their property can force their home to be auctioned off, normally on the steps of the courthouse. These auctions are advertised in newspaper classifieds and are available for anyone to buy, so long as those buyers show up with a check of at least 10% of the anticipated purchase price. If buyers don't have this kind of money readily available, then most often a bank will be the successful bidder. Million dollar or more foreclosure properties can be also be found through brokers who specialize in Real Estate Owned properties, or REO's. These properties can be found by visiting the offices of these brokers or by searching the internet.