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Searching for a Foreclosure?

Many of our clients have said that they would like to buy a foreclosure because they are under the assumption that that is how you get a really good deal. This is true and there are plenty of them right now. Before you go shopping, here is a simplified explanation of how it works.

1. Upside Down or Underwater: When a Homeowner owes the bank more than their home is worth today.
2. Lis Pendens: Beginning of the Foreclosure process when the Homeowner is 30 days behind on their mortgage.
3. Short Sale: When the Seller is in the Foreclosure Process, proves hardship to the Bank and the Bank agrees to accept less than the mortgage amount owed in order for the Home to be sold to a qualified Buyer at, or slightly under, current market prices. This process can take anywhere from 1 to 6 months which requires great patience form the Buyer.
4. REO or Bank Owned: When a Home does not sell in Short Sale or is simply Foreclosed upon it goes to Auction where in most cases the home is purchased by the same Bank. The Bank then owns the home and lists it for sale at or slightly under current market value.
5. Motivate Sellers: While REO’s and Short Sales can be great values, homes that have solid mortgages or no mortgage are often competitively priced, simpler to purchase and in better condition. Right now price means everything and there are some very Motivate Sellers who know this and just want to sell!
6. Multiple Listing Service: Bank Owned Homes, Short Sale Homes and Homes with solid mortgages are all listed on the Multiple Listing Service together. There is no special list for any of them. We send you everything!
7. Pricing: There can be a huge disparity between what price a Seller lists a home for and what it is actually worth or sells for. Every situation is different and today more than ever, even the savviest Buyers benefit from the expertise of a real estate professional who has the ability to research a property and guide them through the process. The only way to determine true value is to know what properties have recently sold for.
8. NOW… This market is a Buyer’s paradise but it will not last forever. Citibank is placing a moratorium on Foreclosures and attempting to rewrite other mortgages in trouble. Many banks as well as Fannie Mae and Freddie Mac will follow suite. Short Sales and Bank Owned property will become a thing of the past and prices will stabilize.