What are the steps to a foreclosure home?
Question:
When I had my broker's license, I sold a number of foreclosure homes.
The procedure takes quite a while ~ from the banks end, they have to go through the repossession process which is quite lengthy...I seem to recall in most cases it was nearly a year. There's a six month period in which the owner can "catch up" the payments, and then once it goes to the bank, there's a whole other list of things that must happen before it can go to market...
There are directories in most cities that list repo's; some banks list them on line, others place ads in the paper.
So, let's say you found a repo that interest you. There are two ways in which the house will be sold: it either is a straight listing (with a realtor ) or goes to auction.
If it is a straight listing, you buy it for what the bank has listed it for ~ there is no negotiation. If it is for auction, then you make your best offer, wait around 6 weeks (more or less) and hope that no one offered more money.
Either way, buying a repo house means you are buying it in as is condition. With some of the houses I sold, the buyer had to bring the house up to building code; with others, the bank brought it up to code. This is something you need to find out before making the offer.
The as is thing is what always worried me ~ if the previous owners were in such bad financial shape they couldn't afford their payments, what kind of shape is the house? A repo sold down the street from me 10 years ago ~ the new owners found themselves with a collapsed sewer line, a lousy furnace and asbestos in the walls. Since they were buying the house "as is" the bank was under no obligation to repair those things.
Some repos are a heck of a bargain and can be worth it, especially if you've done your homework and have had the house thoroughly inspected ~ others are only worth scraping. Either way, it's not a speedy process.
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