Can you please explain to me what the difference is between foreclosure, pre foreclosure and bank owned homes?
Question:
Answer:
Foreclosure: Property is in the process of being taken by the lender or lien holder, usually court procedures have been instituted. Still in the name of original property owner.
Preforeclosure: Property owner has been notified of pending foreclosure due to their inability to pay or meet the performances of a lien or contract.
Bank owned homes: Usually called OREO (other real estate owned) not to be confused with REO (real estate owned). Properties held by the bank as property that they had to take back because of default by a borrower. Property is in the name of the lender.
Hope this quicky explanation helps.
Foreclosure is the process of taking back a home because the borrower didn't pay his debt properly. Pre-foreclosure is the period during which the borrower isn't paying properly and there is a high probability that the mortgage will be foreclosed. Bank owned homes are those homes where the bank has completed the foreclosure process and is now stuck with the home.
So this is the deal with forclosures...( I have more info on my website under foreclsoures and short sales.
An actual foreclosure goes to the court house steps and investors bid in cash for the foreclosure and they inherit all the liens on the house, lots of reaearch involved and you need cash.
But then there are PRE-FORECLOSURES, BANK OWNED HOMES, and SHORT SALES. These are worth looking into!! I get a list of homes in Default everyday. The bank owned homes are where the house went into foreclosure and nobody bought the house at the foreclosure so the property goes bacnk to the bank. ( hey are don't want the house they want their money so they sell it in "as is" condition and there are no disclosures bacause the bank never occupied the home so they don't know what i s wrong.) We need a good home inspection. These are good opportunites but they are usually not in the best condition, because the old owners went into foreclosure and they are mad when they leave. (I've seen a lot of homes where they have taken all the appliances, light fixtures, etc.) But they are priced right!! Most of them need paint, new flooring, sometimes landscaping.
Now Pre-foreclosures are when the owners are days or months away of a looming foreclosure and it order to pocket any equity they made they need to sell the home before the redemption period (timeline on my website) begins adn they loose the house. They are desperate and will look at most offers that let them break even or sometimes lower.
Now the Short Sale these are the hardet to deal with. These owners are up side down ( they re-fi too many times) and they need to sell their house and it is not worth what they owe. This process saves the owners a foreclosure on their credit but they have to get the process approved by the bank and they will only approve iit, if teh owner can prove that he is broke. Usually the only way they accept to take a loss on the laon they made it id the owner was in an accident or something very tragic. There are alot of short sales in the MLS but when you make an offer you don't know if the back will accept the offer because now the owner has to prove they have no money at all in order for the bank to take a loss and sale it quicker thatn going into the foreclsoure process taht could take a year before they get their monry back.
So pre-foreclosures and bank owned are the best deals. Short sales are if the owner can get it apporved by the bank, but you don't know unitl you make an offer because the bank will not talk to the owner or listing agent until they have an oofer in their hand.
So I went into so much detail but hopefully you have a better understanding!!
http://www.foreclosuresinnv.com...
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