The question of foreclosures comes up frequently as customers look over the internet for low-cost homes and hope to find the best deals the can. Here I hope to shed some light on the foreclosure process and where your new home can fit.
The lender will then evict the homeowner 30 days after the homeowner receives notice. During this 30 day period, the home is a pre-foreclosure property, and it is still legally the residence of the previous owner so there is nothing you can do to view the house or know of the condition. Many homeowners will use this 30 day period before eviction to take their frustration out on the home and steal anything they believe to be of value.
The sheriff will auction the property after the 30 day period on the courthouse steps on the first Tuesday of each month. These homes are advertised in the paper for four weeks before their auction. Many times at auction the original lender takes back the house, and it becomes an REO (Real Estate Owned) property or more commonly referred to as a “Foreclosure” property.
To purchase a “Foreclosure” Property, a buyer will submit an offer as they would for any other home, though often the banks will have unique forms they have designed to protect themselves legally. Home buyers purchase these houses in “As Is” “where is” condition meaning nothing will change from the day you inspect it to the day you take possession. Very often there will be little to no negotiation on price as the banks are willing to wait out the market to see if a buyer will present themselves.
There are two schools of thought to finding a good deal on a home that has gone through the foreclosure process. The first is to find a home that had significant damage where the bank does not want to repurchase it at auction and take possession then. The other option is to wait out the market and hope that no one is paying attention to the dropping prices over time until the home becomes a good bargain for its condition and location. So set a threshold where your willing to buy and wait for the house to reach it then as soon as it does, move in and buy the property as quickly as you can so no one who has the same plan as you does the same thing.