ForeclosureWise
Be Wise In Your Real Estate Investments
You've found a property now what?
Who do I contact?
How do I finance it?
What it is worth?
What about repairs?
HUD properties: not the only game in town.
Most people interested in foreclosures usually first check out HUD (FHA) foreclosed properties. The reason for this is simple; there are a lot of them. You can go to practically any area in the country and find HUD foreclosures. However, there are other ways to invest in foreclosed real estate. They range from bank foreclosures, VA, County Tax Sale, IRS auctions, and on and on. There are always opportunities to pick up distressed real estate. There are three main occasions in which you can pick up real estate, either as a home or investment.
The first opportunity is before the foreclosure auction. The term you have probably heard is pre-foreclosure. At this point a homeowner is behind on their mortgage payments and the process of foreclosure has begun. One of the main techniques investors use is to offer to purchase the property from the delinquent homeowner. This situation can be beneficial to both parties. The investor gets a property at a discount and the homeowner can often salvage their credit and in some cases a portion of their equity.
The second stage in which to obtain distressed real estate is at the auction, which is typically held by an auctioneer or trustee who represents the mortgage or deed of trust holder. In most cases you will need to have a deposit in the form of a certified check or money order in order to bid. If you are the successful bidder there is a legal process, which varies by locality, that will give you title to the property. One important thing to remember is that if the foreclosure auction was on a junior lien, a second or third mortgage for example, you will have to pay off all of the superior liens which can include first mortgages or tax liens.
The final opportunity to purchase foreclosed properties is after the property has been taken back by the mortgage or deed of trust holder. These can include government agencies like HUD or VA which insure loans, secondary lenders such as Fannie, or primary lenders such as Countrywide or Bank of America. In either case what typically happens is the lender who now owns the property has to sell it. They typically hire a local real estate broker or other marketing company to take charge of disposing of the property. In order to purchase these properties you should have two things. One is a licensed real estate agent to put in the offers and the other to be either pre-qualified by a lender of have a bank letter for the amount of the property's purchase price.
As you can see there are ample opportunities to purchase foreclosure real estate. All it really takes is knowledge of the process, the local real estate market, and the desire to succeed.