Buying foreclosures in 2017 is still possible... but there are few, and finding the best investments takes time, patience, and excellent due diligence.
Buying foreclosures in 2017. Still possible?
Yes, there are still some opportunities for buying foreclosures. But the amount is very small compared to several years ago. If you are investor looking to buy a foreclosure, ...it'll take a lot of patience and research (or lots of luck).
You'll need to make sure the property you're buying doesn't have a ton of liens attached to it that you'll be responsible for once the title is in your name.
Yep, that happens - and it can HURT! Look out especially for homeowner or condo association liens, tax deed liens, and even construction and other similar companies might be in line to get paid for any money owed.
If you're a property owner facing foreclosure, take measures to stop it.
There ARE ways! Banks will work with you these days to stop the process if they can.
Banks don't like foreclosures any more than property owners do!
First, there are levels of foreclosure.
You'll need to figure out which level is best for you.
Then find an experienced real estate agent to help you!
Hiring an experienced agent doesn't cost a buyer $$$...
remember it's the OWNER/BANK that pays your agent a commission
for successfully procuring the purchase.
So why do it alone? Enlist experienced help.
PRE-FORECLOSURE: when an owner begins to default on their mortgage but the property has not yet gone through foreclosure/court system. This is generally the level where short sales begin. It is also an EXCELLENT time to initiate a private sale, if the owner is not working with a realtor. In pre-foreclosures, the owner STILL owns the house and has full say if they want to or can sell the property. However, when the owner is behind on paying the mortgage... the bank steps in and wants a say in what's happening. To sell privately, the bank would need to be notified and copy of the contract presented to them. This will stop any further foreclosure action temporarily. Sometimes buying a property in pre-foreclosure yields better results and can be easier than buyer foreclosures. They are harder to find, and often the owner is still in denial at this point. But if you can create a good deal for them to help them out, and a good deal for yourself, it can become a very positive experience for both parties.
To sell as a short sale through a Realtor, the bank should also be notified, so any foreclosure action will be suspended (temporarily). If the private sale meets or exceeds the mortgage pay off amount, the bank will be happy. However, if it is a short sale... the purchase price on a contract will need to be approved by he bank. Short sales can be complicated, but they can also really help a homeowner that needs it. It's usually a MUCH better situation than foreclosure. For an investor, working with an owner in either of these two ways using patience and flexibility, can sometimes mean getting a great bargain.
FORECLOSURE: when a bank/mortgage company moves to legally take possession of a property in default, through the court system. Once complete... the property will either be sold/auctioned off at the court house on a predetermined/ advertised date OR...it becomes an REO. It sometimes takes a year or more for a property to get to the auction phase. And often at that point there are liens from associations or utilities or other lienholders wanting to get their share. There's little chance buyers will be able to get an inspection done, etc. There is risk to buying foreclosures this way. Due diligence and lots of research is a necessity... no one will do it for you!
REO: (real estate owned) where a bank/mortgage company has taken possession through the court system and puts the property for sale on the market. The listing will be through a licensed real estate agency, and found just like a short sale and regular conventional listing via the MLS, Realtor.com, etc. The seller IS that bank/mortgage company/Fannie Mae etc. Most REO transactions are straightforward and uncomplicated. REOs can be a great source for buying property under market value... but they may also be distressed and in need of appliances, cleaning, some repair work etc. This is also considered buying foreclosures.
If the property is Fannie Mae or Freddie Mac there could be a few additional hoops to jump through regarding submitting an offer... but those listings sometimes yield good deals. Also, buyers could qualify for the Homepath program (potentially 3% down). Usually the first 15 days these properties hit the market, offers are reserved for owner-occupants only (no investors). If the property doesn't have a viable contract at that point, they will consider investor offers. But this isn't set in concrete. Bottom line... seriously consider REO listings!!
Do a search. Then let us know which properties you've found that interest you. Email us the addresses and we'll a little digging and help get you started on the right track!
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