Recently, we have all heard lots of media coverage on the foreclosure of homes in the state. Because of this, there are lots of people interested in the purchase of properties that the bank might have decided to take a loss on. Some individuals are interested in buying property for investment purposes. Others have an interest in moving to a house with instant equity or to lower their current mortgage payment or even both.
The short answer for any if you ‘re planning on entering the foreclosure market is – use a professional. Using a professional is well worth the cost and most likely will not only keep you from getting stuck in a bad situation but will do just the opposite and make you more money or equity.
The Market – Not so simple:
The foreclosure market can be viewed as simple but is truly complicated involving banks/mortgage companies, real estate attorneys, trustees, deeds, liens, chain of title, IRS liens, local municipalities, and most importantly – your money.
Speaking of money, most foreclosure sales fo through a trustee or a foreclosure attorney that require payment in full 100% at the sale or within 1 to 24 hours after the sale (this fact removes most of us from jumping into the market).
However, don’t get too worried, there are other types of sales involving foreclosures that banks get more closely involved with, therefore you can possibly buy a foreclosure if you can’t get the money in 24 hours.
These days banks are using traditional auctioneers, allowing them to sell a number of properties at one sale location. In these situations, typically a bank wanting to do loans will be at the auction and a buyer will have to place a minimum down payment. The down payment is often non-refundable, than the remainder of the transaction will occur in less than 30 days.
A short sale is the event that a bank will accept an offer for sale of a property short of what is currently owed on the mortgage. These are more prevalent currently but often are very slow to happen even though the banks are stream lining the process.
Condition of the Property:
One important consideration when buying a foreclosed property is the condition at the time of sale. It’s not always possible to see inside the property before it’s sold. Sometime, the previous mortgage holder is still living in the property and is not very willing to let anyone inside. At times, the property has been vacated but is locked and secure therefore one must decide to take a chance on buying without knowing what needs to be repaired.
Submitted by Mike Maitland