How to buy a foreclosure house?
Question:
Answer:
Buying a foreclosure can be a rewarding experience, depending on what phase of the foreclosure you purchase the foreclosure.
#1 Pre-foreclosure
This is when, in my opinion, you can make your best deal. Yo will be dealing with the current owners of the house. You meet with them, try to make the best possible deal you an with the owner. While there check for any necessary repairs that might be necessary.
You will also need to know the balance of the mortgage, see if there is additional mortgages or liens on the property. You might as well collect the mortgage payment booklet, tax statement as well as the insurance information. They are not using them any way. This gives you information that will assist in you deciding if this is gonna be a deal for you or not.
Find out how much the current owner want to have in his hot hands so he can start over again and you can purchase their equity. He will also be able to tell you how many months he is behind in all his mortgage payments.
Find a method of finding out the value of the properties in this neighborhood, so you will be able to determine if there is equity in the proposed purchased.
Now take the mortgage balance of all the mortgages, what is needed by the current home owner want the delinquent payments and the cost of repairing any thing need repairing. Subtract this from what you think the value of the property is worth. This will give you and idea if you are gonna make a profit in this transaction.
You will need enough money to bring the mortgages current, give the homeowner what he want in his hot little hands to move on as well as enough cash for insurance and the delinquent taxes also closing fees to the title company and escrow to close this transaction. You might want to take title to the property subject to the existing mortgage.
Taking title this way will leave the mortgage in the old owners name while transferring the title of the property to you.
Once the transaction close, you will have to do any necessary repairs, and either keep the property for your use as a rental or your personal home or you may flip it for a profit.
#2 Foreclosure Sale
The other way is to purchase the foreclosure at the foreclosure sale. You will have to have enough funds at the sale to make the minimum bid of the mortgage company that is doing the foreclosure. The funds must be cash, cashier check, or a bank check drawn on a bank in the state in which the foreclosure is located. You might or might not have seen the property. You are also bidding against the bank which will make the first bid at what ever is owned them on the mortgage. There are the normal closing cost unless you can get the bank to pay the closing cost.
#3 Real Estate On Hand (Bank now owns the property)
You will now have to go through a real estate agent to get a foreclosed house as most lenders now have contracted out to real estate brokers the chore of selling their real estate they have after a foreclosure auction or sale. The selling broker is now attempting to get the fair market value of the property and in some instances will allow a fee for some of the damage to the property if any.
You will pay the normal closing cost unless you put it in the contract that the seller pays all closing cost.
You will find foreclosures at your local county court house at the recorders office, call and see if there is a fee of some sort to look and copy the list.
You may also subscribe to a foreclosure listing service.
You may advertise in your local newspaper that you are intersted in foreclosures.
I hope this has been of some use to you, good luck.
"FIGHT ON"
Different government agencies sell homes that have been foreclosed on. go to: http://www.hud.gov
They list every government agency that has real estate for sale. i.e. VA, IRS, SBA, Federal Land Bank, Fannie Mae, Ginney Mae will give you a start.
If you know what house you want to buy then have the property checked out by an attorney and either one or both of you can attend the foreclosure auction at the courthouse in the county that the property is located in.
Ask the attorney if you need to do anything else to do. You will have to secure certified funds or cashiers check in the amount of the purchase price and take it to your attorney and they will forward it to the company that you are paying off. The company will then in a month or so send you a deed for the property.
You need to study it thoroughly.
I have bought a few. Personally I hire a broker to do it with me. I just stand there. The whole thing takes only a few seconds and I can't seem to keep up.
Your local county sheriff's website or office has a free list of foreclosures in your area and information on how to buy them.
If you are not a professional then I think you better join investor network and it will give you a good tip and information.
hud.gov is good, but http://www.emailforeclosures.com... has all the same homes plus many from private (non-government) sources. And it's free like hud.gov.
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