To be successful in buying foreclosure properties there are a few things you should know.
The relevant law of the state or country you plan to invest in.
Every state and country has different laws about foreclosures and there are things you can and can’t do. The best way to make sure what your rights and obligations are is to get professional legal advice.
If a property is sold under the supervision of a court the proceeds will firstly be used to pay off the mortgage, then the other lien holders and finally the mortgagor/s.
The second way is foreclosure by power of sale. This is when the mortgage holder or lender sells the property without the court’s supervision. The proceeds get split the same way as when the sale is under court supervision.
Foreclosure process
You need to understand the process of foreclosure in the relevant state or country. What are the stages? When can you buy? What are your rights and responsibilities?
Market value
You need to know how much a property is and could be worth. If you do not have an idea of property value you can use an advisor to help you.
You have to be quick
Usually when these foreclosure properties hit the market they are scooped up quickly. The best way for you to get your hands on these properties is to check websites and news papers and be the first one on the day the property is sold.
Where to find information
There are many websites where you can check for property for free or pay a subscription. Just remember that free listings might not always give you the best deals out there so do your research and find a site that delivers.Watch out for banks issuing notices in the paper, most of the time the law requires the banks to give notice before they foreclose on a property. Usually you will find this in the legal section of the paper, watch out for words like; “Notice of default” or “Lis pendens”. You will find all the details you need about when and where it will take place.
Look out for auctions. These again can be found in the news paper and the web. Some sites will let you subscribe and you will be notified of auctions well in advance.
Call the bank’s REO (real estate owned) department and ask if there are any properties that did not get sold on auction.
As long as you keep up your research and find ways to find foreclosure properties you will be successful, remember to always strife to be an expert and never give up.
