Thinking About Buying a Foreclosure - Part 2

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Real Estate Agent with Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com TX License #0552989

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Pre-Foreclosure

A pre-foreclosure is when you buy the home directly from the homeowner, before the bank officially forecloses. This type of purchase does not require as much capital as other foreclosures. Also, since you are purchasing straight from the homeowner, you will be able to gather all of the necessary information, such as inspection reports, title information, etc. that may not be available with other foreclosure properties. Once you take over the mortgage, you will be responsible for all future payments as well as any overdue back payments.

Auction

A foreclosure property will usually end up at an auction. Real estate auction practices vary by state but common practice is for the auction to be held on courthouse steps, in front of the foreclosed home, or at the county clerk’s office.

Real estate auctions offer the best chance for a great deal but also hold the greatest risk. Auction properties are sold as is, with no opportunity for potential buyers to perform inspections. When buying a home at auction, the buyer must pay cash, usually a cahiers’ check. It is also possible that there may still be tenants living in the home. In such a case, you would be responsible for the often costly eviction process.

REO

Once a foreclosure has gone to auction and failed to sell, it becomes a Real Estate Owned, or bank owned, property. Most homes do not sell at auction, most fail to even get any bids.

An REO property is the least likely of the foreclosure properties to represent a bargain, but it is also the least risky. The property can be fully inspected, any title issues can be found and dealt with, and the sale can be subject to a mortgage. REO properties also tend to be in better condition than other foreclosure properties.

Another thing to keep in mind when purchasing a foreclosure is that some states have a redemption period that allows the original owner to buy back the property by paying the remaining balance owed. You may be able to have this redemption period waived, so check the state laws on this topic before purchasing.

Still interested in buying a foreclosure property? If so, always do your research before purchasing!

 

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  1. Diane Duffy 03/10/2012 11:15 AM
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Topic:
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Comments 16 New Comment

Rainmaker
920,953
Lisa Von Domek
....Experience Isn't Expensive.... It's Priceless!
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com

Good morning Michael,

Congratulations to/on your son's new home - another REO off the books!  And thank you, for stopping in and commenting - I am so pleased that you liked this foreclosure article.

Have a wonderful week!

March 07, 2012 03:53 AM
Rainmaker
988,059
Rob Thomas
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954

If you are thinking about buying a foreclosure in the Dallas area then you definitely need to give Lisa a call!

Have a great night!

March 07, 2012 02:09 PM
Rainmaker
920,953
Lisa Von Domek
....Experience Isn't Expensive.... It's Priceless!
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com

Hello Rob,

Thank you for the wonderful endorsement!  

Have a great night, and a fabulous week!

March 07, 2012 02:21 PM
Rainer
130,998
Bill Blankenship
Lisa Von Domek & Associates, LLC / Real Living Real Estate Group

This is a great, information filled 2-part series on foreclosures and REO properties!

March 08, 2012 02:18 AM
Rainmaker
920,953
Lisa Von Domek
....Experience Isn't Expensive.... It's Priceless!
Lisa Von Domek & Associates LLC, Real Estate Broker/Associate with Real Living Real Estate Group www.LisaVon.com

Thank you, Bill - foreclosures and REO's can be difficult, but a well-prepared Buyer will be armed with the tools they need for success when working with an experienced Realtor.

March 08, 2012 02:28 AM
Rainmaker
920,953

Lisa Von Domek

....Experience Isn't Expensive.... It's Priceless!
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