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Foreclosure Epidemic Leads to $1 Homes

George Washington led the Continental Army to victory over the British, participated in the Continental Congress that shaped the Declaration of Independence, was the first president of the United States, and now he may buy you a house-or at least one of his bills may be able to help you do so.

Yes, a single $1 bill may really get you keys to a foreclosed home, at least in some areas of the country.

Although buying a foreclosed property for a buck is considered an infrequent event, it's starting to happen more often due to increasing foreclosures.

According to a July report by foreclosure analyst, RealtyTrac, U.S. foreclosures rose an astounding 55% since the same month a year ago.

As a result, bank owners are backed up and desperate to get rid of foreclosed houses that rack up bills in back taxes and unpaid utility bills.

For example, a Detroit house sold for $1 to an undisclosed buyer, according to a recent article in The Detroit News.

The empty and foreclosed-upon house, which sold at $65,000 less than two years ago, became a target to squatters and scrappers who cleared it of its metal, doors, pluming, furnace, and everything else of value.

The bank originally put the house on the market for $1,100, but after months of waiting for an offer, the bank lowered the price to $1 and agreed to pay $2,500 in sales commission, a $1,000 bonus for closing and $500 of the buyer's closing costs.

It sounds like a foolish deal, but it made sense to the bank.

It was eager to be released of the house's back taxes and unpaid water bill, which added up to about $10,000.

With the sale, the buyer agreed to assume the house's tax debt of $3,900 and said she considers the home an investment, according to the article.

Like a Good Neighbor, HUD is There

Cities are also getting in on the $1 trend.

Local governments are paying attention to studies that confirm abandoned homes attract crime and decrease other home values.

In fact, just one abandoned house on a block can decrease the value of surrounding homes by as much as 15%, according to a Philadelphia study.

Cities are taking action to preserve their communities by participating in the Department of Housing & Urban Development's (HUD) Good Neighbor Program, which sells foreclosed homes directly to the city for $1 (plus closing costs).

The program allows the city to turn a foreclosed home into public/city property or to turn it around to a non-profit agency that can rehab the home and create affordable housing.

The rules of the program are simple: once a property has been on the market for at least 6 months, the city is given a 10-day window to purchase the property.

This window gives the city a head start in scooping up the house before private bidders make offers.

Cities must submit their objectives and plans for development and agree that any proceeds from the sale of the home would be reinvested in community development.

After the 10-day window expires, the house goes on the open market for $1.

Foreclosed-Home Buying-The Secret's Out

Experienced investors and local governments aren't the only ones who can take advantage of these great housing deals.

The truth is that anyone can buy a foreclosed property; however, in an effort to avoid competing bids, investors tend to keep quiet on the ways of the business.

What If My Home Is Up for Foreclosure?

If you or someone you know is having financial difficulties, you should know that there are ways to protect your assets and keep your home.

Time is of the essence in many situations, to connect with a bankruptcy attorney, complete the form on this page.

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