Frequently Asked Questions:

How do I buy a foreclosure?

What to do in pre-foreclosure?

How do I buy a foreclosure?

If you have the cash and you are able to fully investigate and research the property, then you can always buy foreclosures from the court house steps. In most counties they have foreclosure sales daily. You will want to check with your specific county on their procedures.

However, buying a house from a foreclosure auction can be risky and is sometimes best left to real estate professionals, as some properties can come bearing liens that you will be responsible for if you plan on purchasing the property.

If a property isn't bought by an investor then the lender buys the property back at the auction.

At this point, the lender directly contacts an REO specialist or uses a third party asset management company. The asset is assigned to a local agent who checks the occupancy of the property. An eviction may need to be completed prior to gaining access to the property. Once the property is vacant the agent assesses the damages and reports the information to the management company. The management company then orders an appraisal. After these steps, the property is ready to be listed. Once the property is listed anybody can make offers.

You will need to use the banks contract and addendum for all offers.

You will need a pre-qual letter or proof of funds for all offers.

If multiple offers are received you will be asked for your highest & best offer.

The bank contracts do allow for inspection. All of their contracts do not allow a repair or termite credit amount. None of the bank contracts are assignable. All the banks require the escrow deposit be held with their title company. Each title company has slightly different policies but for the most part it is like a typical sales transaction.

Are You In Pre-foreclosure?

Have you missed some payments on your property recently? There are a few options you have to avoid having a foreclosure on your credit history.

Contact your mortgage company and find out if you can reinstate the loan. Sometimes they will allow you to put any late payment fees and interest on the backside of your loan and bring you into compliance.

If you have had income adjustments or you will not be able to continue payments you should try to sell your home as soon as possible. Making contact with your mortgage company is important. They want to see the property being marketed. Be aware of time restrictions and market conditions. Also inquire about what you owe vs. what your property value is worth. A short sale may need to be negotiated. You should talk to the lender about the possibility of a sales price below what is owed on the mortgage and what steps will need to be taken.

If your situation has changed, refinancing through another program might be a good option. You will want to seek advice of other lenders and programs that may be available to you to lower your monthly payment.

There is a possibility of adding a 2nd mortgage and using that cash to help bring you current with your loan. This avenue should only be explored if there was a short term reason for the delinquent and missed payments.

Whatever you do, don’t wait for the mortgage company to foreclose. Contact a specialist right away to discuss your possible options. Be aware of individuals or companies that may try to profit off of your distress. It is always best to contact an agent or someone that will represent your best interest.

If you have someone that wants to pay cash for your house, tell them that you will select an agent to perform a Broker’s Price Opinion (BPO) and they will need to pay $100-$150 for the report. Be aware of companies that will offer to buy your property and allow you to stay there. They usually offer to set you up on a lease to own option. Contact an expert to make sure this company is legitimate. There are many companies that will take advantage of your situation and it could create a much worse outcome.