Making an offer at the county courthouse is one way to buy a foreclosed property. The trustee, auction, or bailiff sale marks the second stage of the foreclosure process. Prior to the auction the property is considered to be in pre-foreclosure which begins when the owner receives the first legal document, the Notice of Default or Lis Pendens. If the property does not sell at auction, the bank repossesses it.
There are advantages to buying a foreclosed property. It is much easier than buying an already foreclosed property. When purchasing a foreclosed property, the owner still occupies the property, so questions about the property can be directed to the owner. The prospective buyer can do a full inspection of the property and really kick the tires, so to speak, and the short sale is very much possible.
In many cases, the buyer can get a better deal because the bank does not have to invest the same amount of money in a short sale as it does in a foreclosure.
A pre-foreclosure is when the owner misses three payments on the property and the foreclosure process begins, while a short sale is when the property is sold short. This is when the bank accepts less than what is owed on the mortgage as payment in full.
How much below the mortgage can someone expect to buy a pre-foreclosure property? There are about five to 25%.
The other opportunity is to buy a property from the bank and those are the ones that have gone through the foreclosure process and have been repossessed by the bank. In today’s market, it is recommended to look at bank properties first. This is especially true for those who are looking for a property to live in for good reasons. Buying a property from a bank means a safe purchase for the buyer, the title has been cleared, the bank has done minor work on the house depending on which part of the country you are in, and they may give you a discount depending on the state. of the house in which it is located.
The professional investor, on the other hand, chooses to buy the properties in foreclosure in the courts since they can risk a significant amount of money. This is not advisable for an individual buyer looking for a home for his family unless he truly understands the risks involved. The downside of buying a foreclosed property from the courthouse is that he will have to take the property as is. Aside from having to pay for the property in cash, the buyer will have to be responsible for all liens on the property. Do diligent research on how many mortgages there are on the property you are considering. Title companies that specialize in doing that research, as researching it on your own is time consuming.
Finally, to help you find a property in foreclosure, a Realtor can help you a lot as they can deal with banks and do a short sale on your behalf.
