Foreclosures

I am a new investor, and just always assumed that all foreclosures show up on the MLS Listings. After talking to my realtor, I guess this is not the case. Does anyone have any tips on the best way to find these properties?

Read the wholesaling forum, that will give you a better idea. Herbster

It depends on the state but for the most part, those that are not taken sometime during the process do show up on the MLS. But the deals are prior to this.

Preforclosures you get from legal notices that they are going to foreclose or we buy houses signs. You have to act quickly. You buying the house is you buying the liens and judgments on it too. Have a little time to stop the sale and clear up or reduce the amount of the liens to something doable.

Sales on the court house steps. You buy the house at the foreclosure sale often on the court house steps. You also bought the house and liens here as well. Too late to lesson risk and clear up the liens. You own them here.

Bought directly from the REO Realtor of the house just after the house has been sold and ended up back in the banks name because no one wanted it due to the massive amount of liens on it. The bank clears up the liens and you will be buying it with a clean title. Get on the REO’s investors list so they can sell it to you before putting it on MLS.

Then you’ve got the foreclosures that are on MLS. None of those investors wanted them and they are offered up to the general public. Still best here to deal directly with the REO rather than your Realtor. They want their full commission rather than splitting it with another Realtor so they will do sneaky illegal things like telling other people they are working directly with your offer amount so they can slightly outbid you. So, lesson to be learned, at this point in sale, just deal directly with the REO.

Like Hooch said, it depends on the state, but keep in mind that pre-foreclosure properties won’t be listed in the MLS.

Hooch,

Are you sure about this? Foreclosure extinguishes junior liens, right? The foreclosing lien will be paid from the proceeds of the foreclosure sale. You make it sound like buying at the foreclosure sale is the same as taking the property subject to the existing liens.

When you buy the house on the courthouse steps the liens and judgments stay on the house for you to pay off. It does not eliminate the liens or judgments unless no one buys it and the bank ends up having to buy it. They are now not only the note holder but the owner and they have to pay off the liens so they can sell it with a clean title.

Dave T, you are right that proceeds from the sale pay junior liens but how often do you find a house for sale on the courthouse steps that has equity beyond the amount of the 1st mortgage? There must be equity to pay anything.

This is why in preforclosure, junior liens can be paid off with 5 to 10¢ on the dollar. The positioning is that you can either get nothing when it is foreclosed on, or you can remove this lien from this property for 5¢ on the dollar so I can buy this house and I don’t care if you wish to continue to collect from the debtor.

I have also heard it’s a little risky @ courthouse steps for the reasons hooch listed.If you have a decent partnership with a title co you can get them to check it out for you,I still have doubts thu.Also if it is still occupied you have the pleasure of evicting them out(and hope they leave without destroying the place).REO’s are more pricey and competitive,so I guess they all have ups & downs.I guess if it was foolproof all the fools would be doin it.

The courthouse steps is a good place to buy property if you FIRST go to the courthouse and learn how to thoroughly do a title search yourself. It costs too much money to hire a title company to do this for you over and over for all of these houses that you don’t end up buying.

I went down to the courthouse and sat down in front of the computer. I had absolutely no idea what I was doing. The people who work in the office will show you how to use the system but not what everything means. I found the ladies in there doing title searches for lawyers were very helpful and gave me lots of tips for free. I now can thoroughly do a title search myself as well as one of them can. I will hire one of the women in there to do the official title search on the house if I buy it.

I suggest that anyone interested in buying on the courthouse steps go learn to do a title search prior to doing so. You can start by only bidding on the easy ones where the person only had a judgment or two and down the road as you become more experienced you can bid on the ones that have boatloads of judgments, etc.

Decision making is something you just can’t avoid no matter what kind of situation you are in. Tough decisions are even harder to make. Sometimes, as a homeowner, you might be in a dilemma as to what to choose among bankruptcy and foreclosure of property. Perhaps the information given below might help point out the right direction for you and help you make a better decision, with regards to your circumstances.

No matter which option you choose, here are a few things that might remain the same – you will still lose your home; you will damage your credit rating severely while your credit score would plummet by about 200-300 points. The effects of either of these options are long lasting and have severe implications on your future credit availability, reputation and other financial matters worthy of consideration.

Choosing between bankruptcy and foreclosure is like choosing how you would like to die – use an aspirin overdose or just get shot. You must realize that any bankruptcy event will linger on your credit report for more than 7 years. While Chapter 7 bankruptcy is strictly for unsecured loans, the way it links to your home loan is when you might be in a position to pay off your mortgage when you file bankruptcy with your unsecured loans like cards and bank overdraft. Chapter 13 bankruptcy is another option you might like to consider; the big brother of your Chapter 7 version.

When you file a chapter 13 bankruptcy, the courts will mandate you to pay your remaining debt in an easy, payable manner within a stipulated, pre-set time – the priority is usually to pay off your protected and secure loans and at least 25% of your unsecured ones within 5 years. The amount is usually set to be additional to the mortgage payment and when you can’t do the same, the lender will request for a stay request and proceed for a foreclosure process. An individual applying for a bankruptcy in his or her name and that wouldn’t affect the credit ratings of his/her spouse, unless the property is a joint-ownership.

You will also do well to remember that in the event of a short-sale approach to the foreclosure, there is a likelihood of have to pay up a mandatory deficiency balance if the lender so decides. It is best if you leave the entire fact gathering to competent professionals like agents and attorneys, but take the decision which best suits you.