Need help on purchasing homes through foreclosure?
Thursday, March 11th, 2010 at
8:19 pm
I’m interested in purchasing homes through foreclosure. I know nothing about the process. I visited my local courthouse today and looked at homes on the foreclosure list; but here are my questions: does a person bid on the property? with whom do you speak about (any) taxes or leins and whatever else is owed on the property? who is actually selling the property: my county? the bank with whom the loan was defaulted? if there’s a resource online, it would help. i don’t want to get burned.
Tagged with: Foreclosure • help • homes • Need • Purchasing • Through
Filed under: Foreclosure
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Contact a Mortgage Company with Realty available and let them know about the floreclosure home you wish to purchase, let a loan Officer/Originator or a Mortgage Broker work out that for you. The price may go a little bit up, it will be only the closing fee. Good Luck Talk to a Broker or Loan Officer/ Originator.
Buying a home through a foreclosure is a risky and sometimes lengthy process.
To answer your questions:
yes a person does bid on the property
Speak with a real estate lawyer or title company (or if you are savvy visit your local recorder’s office and local courthouse to run records)
The sheriff’s is the one selling the property to pay for the liens on it (ie the bank). In many instances the bank will try to buy back the home to resell it.
FYI – in a foreclosure sale – any liens on the property are wiped out. There are typically two kinds of foreclosures that you will find – one for taxes and one for mortgages. Taxes come first – so if someone gets too far behind on their taxes the county will foreclose. Even though a bank may hold a mortgage they cannot simply sell the house – the county must still do that for them, since they do not hold title.
Buyer Beware: You cannot inspect a property in foreclosure. Also even if you have the winning bid on a foreclosed property, the owner can still manage to get the property back. I have seen foreclosure sales drag on for months.
Buying foreclosed homes can be very lucrative if done properly and you work hard at it. Buying foreclosed homes at the courthouse can even be riskier, especially if you plan on obtaining mortgage loan financing for these properties. Here are the answers to your specific questions:
1. Yes a person bids on the properties at the courthouse and many times a bank representative will be there to bid on many of the homes as well to make sure they don’t sell for too cheap.
2. You need to do your own research on the property to find out about taxes and liens in advance of the auction. You can check at the courthouse in the county clerk’s office to find out that information.
3. The county is in charge of the sale. The bank has foreclosed on the home and should be listed as the seller and you would be the buyer if you won a home at auction.
You really need to do your homework on these properties. You can not get inside the properties to see them unless you stop at the home before the auction and someone is still living there and they will let you in. However, if a homeowner is losing their home to foreclosure this could create an awkward situation. You need to pay 10% down with certified funds or cash at the time of the winning bid and the remainder is due within 30 days. After 7 days interest starts to accrue on the balance that is due. Most lenders require a full appraisal and with a home being sold sheriff sale you will have a problem most likely getting an appraiser into the home as the sheriff’s department will not let you in and if you break in if no one is living there it is trespassing. This is one big obstacle with trying to finance these types of properties. If you have the cash to buy the home, then you don’t need to worry about appraisals and mortgage lenders though. However, if you can’t get into the house to see it beforehand, how do you know how much work really needs to be done to the home and how much damage their is inside. Chances are if the house is vacant the upkeep of the home was not the greatest.
Let the Buyer Beware is what you will read at a sheriff’s sale. Once you win a bid you are agreeing to buy that home. You can not back out without losing your 10% down payment and being held in contempt of court. You really need to know what you are doing when buying homes in these types of sales. Below are some links about buying foreclosed homes and investing in real estate. You may be better off buying foreclosed homes that are being sold by a Realtor. You can still get some good deals and you have the ability to check out and assess the home beforehand and then decide if it is worth the investment.