If you’ve been in the real estate investment game for a while, you probably know that foreclosed properties tend to come with attractive deals. After all, foreclosure sales are distress sales. But foreclosure homes also come with a number of drawbacks; and one of these is the risk they come with.
Most investors feel tempted to invest in foreclosed homes thanks to the possibility of landing a great home at a bargain price. However, the process can be more complicated than it appears. Here are important considerations you need to take into account when buying a foreclosed home.
The type of foreclosure matters
There are basically two types of foreclosures in Minnesota: the strict foreclosure where the property’s title directly transfers to the foreclosing without going through the sale process or the decree of sale foreclosure where the court supervises the foreclosure sale process.
If the property you are interested in is set for a strict foreclosure, the court will set the foreclosure date, also known as “Law Day.” Legally, this is the last day the homeowner can redeem the home. If the home is set for a decree of sale foreclosure, then the homeowner is at liberty to claim back the home as long as the court hasn’t approved it for sale.
The redemption window if the home is set for a strict foreclosure
During a Minnesota strict foreclosure process, the court will be responsible for setting the redemption period, which is usually the time between the judgment and Law Day. This period can be anything between 21 days and 90 days. The homeowner will automatically lose ownership of the property if they fail to redeem it during this period.
Understanding your rights
Ideally, investing in a foreclosed home can be a great financial decision. Learning more about the Minnesota foreclosure sale process can help you avoid costly pitfalls when purchasing a foreclosed home.