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Tips on Buying Foreclosed Homes. Part 1. What is a foreclosure?

Tips on Buying Foreclosed Homes. Part 1. What is a foreclosure?


Tips on Buying Foreclosed Homes.  Part 1.  What is a foreclosure?

Fred Miller, Realtor    www.RichmondKatyHomes.com  FredMiller9@gmail.com 281/9242531

 

Don’t get confused between short sales, foreclosure postings and foreclosures.

 

Short Sales.

A short sale is a property that has not gone to foreclosure.  It is technically still owned by the purchaser.  Usually the purchaser is behind on his payments and does not want a foreclosure on his record.  The idea is to get the bank to reduce the payoff amount and sell it to another buyer.  The bank does not have to go through the foreclosure process and lose as much money as they would get by short sale.  The problem is that the banks and the purchaser are not always on the same page.  Good luck if you try a short sale.  It is a long drawn out process that usually does not work.

Foreclosure Postings.

When a bank forecloses on a home the foreclosure notice is posted in the county clerks records.  This does not mean that it is a foreclosure.  Several things can happen to prevent or delay foreclosure.  There are internet companies that provide foreclosure postings to you for a fee.  A “Deed of Trust” foreclosure must be posted three weeks before the first Tuesday of the month.  If all goes according to the bank’s plan, the house is sold on the county courthouse steps on the first Tuesday.  In Fort Bend County it is done on the lawn in front of the courthouse unless it is raining.  A representative for the bank sometimes shows up and bids the property in at the dollar number that the bank tells him to bid.  Or it might not go to foreclosure sale and is posted again, or is settled.  This can go on for months.  Sometimes this is the amount owed on the house.  You may bid higher than the bank representative and buy the house.  You have no title insurance.  You have not inspected the house.  Good luck if you buy at the courthouse.

Foreclosures.

Foreclosures are bank owned properties.  They have gone through the legal foreclosure process and the bank owns the home.  The home may or may not be occupied by the purchaser or a renter.  Banks may be Fannie Mae, Freddie Mac, HUD,  Bank of America, Wells Fargo, Chase and a large number of other institutions.  You may have seen obviously vacant homes that must be foreclosures.  It is very difficult to find out who is the processor for the bank owner.  There may be a management company between the bank and the realtor with which the property is finally  listed.  It is not a worthwhile effort to try to find out.  Wait until it comes on the market.  This is what is referred to as “shadow inventory”. There are thousands of homes in this situation.  

 

 

Fred Miller, Realtor    www.RichmondKatyHomes.com  FredMiller9@gmail.com281/9242531