If you’ve thought about purchasing foreclosures, it’s important to know the process first. The process is different from state to state. When a homeowner defaults on their mortgage payments, after a set amount of time, the bank will begin the ‘foreclosure process’. Some states have a ‘redemption period’, other states have a ‘non-judicial ‘mortgage process (no court appearance). In order to educate yourself you can use the Internet and type in wording such as ‘foreclosure process’ , in your state, in the search engine.
In some states the homeowner can have up to year to redeem the property. So even though the property has been foreclosed on, the homeowner still has time, depending on the state, to recover their property back; this usually requires that all monies due are paid and the mortgage is brought current.
Regardless of the process, if you’re thinking of investing in foreclosure properties, it is essential to know what the process is in the state you’re going to buy them in. Chasing after foreclosures can be a laborious job so you must be patient and tenacious in order to be successful. Most foreclosures require an amount of repairs and refurbishing due to the lack of maintenance from the previous owner. As an investor you should, if possible, determine the cost of such repairs. Foreclosure properties are generally sold ‘As Is’ and therefore the costs could be extensive.
One should also be aware that lenders are usually aware of the current market value of the property, so negotiating a lower price can be somewhat daunting as well. However, when the real estate market is slow, you do have a better chance of negotiating a lower price.
Terrie Hunt , Broker / Owner, River Ridge Realty, (916) 663-6300. “Outstanding Life Member” of the Sacramento Association of Realtors. DRE #01213387