Buying foreclosure property

Many, many questions from all of you lately - so here are some basics:



3 types of Foreclosure Sales:

1) SHORT SALES

The homeowner has negotiated with the Lender to put his own house up for sale for less than is owed on the mortgage. The homeowner benefits by limiting the damage to his credit, the Lender benefits by not having to foreclose and sell the home themselves. This BusinessWeek blog explains further

Look for these if you:

• Are looking for a traditional sale - a nice home to move into


• Have patience - Lenders are VERY slow to respond on offers

2) AUCTION

The Lender has foreclosed on the property, and will try to unload it quickly through an auction process. Yes, it is just like you see in the movies - the auctioneer stands outside the home at the appointed time and takes bids.

Go to these if you:

• Have ready cash - often $5 - 10K in cash is required on the day of the auction if your bid wins.


• Are a gambler - many times access to the inside of the house is limited, and they are sold "As-Is."


• Have time and patience - You may be faced with evicting a current tenant, paying off liens, etc.

Your attorney will love you for buying one of these.

3) LISTED FORECLOSURE

The Lender has foreclosed, perhaps tried an auction, and now has listed it with a broker to be sold in a traditional manner.

Look for these if you:

• Are able to put at least 5% down and close in 30 days.


• Are willing to do/pay for some repair work if necessary. (These are also sold "As-Is.")

The property listed here is this type.

Oak Realty handles all three of these types of transactions. For the record, I let the experienced guy handle the auctioneer job. He's got the voice for it, too.