First of all, foreclosure houses, or "properties auctioned by the court", are houses that have been forced to auction by the court. When the debtor (owner) is unable to perform the loan contract or is unable to pay off the debt, the creditor applies to the court for compulsory enforcement through judicial procedures, auctions the house in the debtor's name, and uses the proceeds of the auction to repay the claim.
Now there are more than a million foreclosure houses in China, so how did these many foreclosure houses come about?
First, the tenants
In the past two decades, the mainland has experienced a golden period of real estate development, and house prices have soared. Among them, speculators have undoubtedly played a driving role. However, in recent years, due to the economic environment, many speculators have no choice but to cut off supply.
2. Buyers who have cut off their supply
This is also an important source of foreclosure housing, many people previously purchased properties through mortgage loans, after three years of the pandemic, many people lost money or lost their jobs and could not continue to pay monthly payments.
3. Enterprise investment mortgage
These businesses were originally engaged in other industries, they invested a lot of money to buy a house in full, because of the need for funds, and then took out mortgage business loans, however, when the economic situation was poor, they could not repay the loan on time, so they were sued by creditors.
4. Other debt disputes
In recent years, many brick-and-mortar stores have become very poor. Some friends who were sued for losing money in their businesses were forced to auction their homes because of debt disputes.
Benefits of buying a foreclosure house!!
Lower house prices: Since it is an auction, the starting price is generally lower than the market price, usually between 70% and 80% of the market price. Since most people do not understand the channels of foreclosure houses, the number of bidders is small, which makes it possible to pick up leaks.
Legal protection: The court enforcement procedure ensures the legality and authority of the transaction, effectively avoiding some of the purchase risks of new and second-hand houses.
Investment opportunities: For experienced investors, foreclosure homes offer the possibility to find potential investment opportunities to acquire properties with room for appreciation in the market.