How do i buy a foreclosure?
Question:
Answer:
There are several phases that a foreclosure go through and depending on what phase the foreclosure is in will depend on what you need to do.
#1 Pre-foreclosure
This is when the owner is several months behind in his/her monthly mortgage payment. The lender might or might not have issued a foreclosure notice.
You may approach the current owner,make a deal with this person by giving him something for the equity he has built up. check for any damages that need repair, find out the monthly payment amount and how many months are behind as well as the fees and other cost spent by the lender attempting to collect the late payments.
#2 Foreclosure sale/bid
This is where the owner has failed to bring his mortgage current, the bank/lender is tired of listening to excuses and have decided to go through with the foreclosure so a notice of sale is prepared and issued, giving a date and place of sale.
At this sale a minimum bid has been established. This is the balance of the mortgage any and all late fees to include any fees attempting to collect the mortgage payment.
At this sale you must present cash, cashiers check, or money orders in order to be able to bid on the property. Without any of the mentioned items you will not be able to bid for the property at all.
#3 Bank Lender (Real Estate Owned (REO))
The bank has now legally taken the property, it is recorded in the name.
You may at the close of the sale immediately send a letter with a price you will pay for the property and a check for at least 10% down (showing good faith) with a method on how you will come up with the rest of the money. Sometimes this work, but mostly depends on the bank.
Failing to do that the bank will assign the property to a local broker for sale at the fair market value (FMV). They might consider and offer a little off for a few repairs. This is like buying a property listed by anyone for that real estate broker.
These are the phases in which you may purchase a foreclosure property.
I hope this has been of some use to you, good luck.
"FIGHT ON"
1. Find out which bank the home is being financed through.
2. Get Pre-Qualified for a Loan with a Broker or Loan Officer
3. Depending on the Bank they may require you to pay the back dated payments which were missed from the owner of the home...
4. If you are not able to locate the name of the bank...Call the Clerk of Circuit Court or County Records and Request the information; it is all public information...Should be no problem.
You can fill out a free application on-line to get pre-qualified:
www.FinanceYourWay.com
Well, you can always go to a mortgage lender or a bank, and ask for a list of their R.E.O. (Real Estate Owned) properties. The banks are eager to rid themselves of these properties so you can easily make a quick deal.
Or, look in the public notice section of your local newspaper to find pre-forclosure listings. That will have notices of pre-forclosures and also public auctions to be held. If you are going to make an offer straight up with the owner, make sure you are sympathetic to their situation. An owner facing foreclosure hates the fact that he or she is losing their home. So, instead of saying ' hi, I want to buy your house.' try being more helpful to their situation.
Probably the best way is to go to a real estate agent to write the offer for you, present it to the bank and continue to navigate it to closing. You need to be patient though. Once a bank owns a property, there is a lot of red tape and a lot of people involved on the selling end. Most foreclosures take a long time to negotiate and often are delayed past the closing date on the contract. They usually have a provision in their contract that if the closing is delayed and you, the buyer are at fault, you have to pay them a flat fee or a "per diem" fee (for each day it goes beyond closing). Unfortunately, if the closing is delayed and they are at fault, you are at their mercy and they don't have to pay. Good to have a back-up place to stay past closing since this happens often.
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