Types of Foreclosures

Posted on September 1st, 2008 by saman

When one talks about foreclosures, they are usually talking about homes that are bank owned and are sold under value.

What many are unaware of is that the foreclosure process consists of three steps and if you are going to buy a foreclosure home the prices of the homes will be different depending on where the house is in the foreclosure process.

There are three kinds of foreclosures. There is the pre foreclosure step, the foreclosure step and the post foreclosure step.

A home in pre foreclosure is when the homeowners have only missed a few house payments and the lender isn’t involved yet. If you are in this situation than there is time to stop foreclosure. You can find foreclosures by contacted a realtor, a lawyer, or even someone at the office.

Real Estate investors are searching for foreclosed homes at bargain prices. When you buy a pre foreclosure home, you should can deal only with the homeowner and negotiate a price that you both find acceptable. This is the ideal situation.

When the buyer and seller reach an agreement, this helps both parties. The seller of the home will be able to fix their credit. The buyer of the home will be buying the home at a discounted price and does not have to deal with an angry owner who has fallen into financial stress and my even damage the home before the bank takes it.

If the property has reached the foreclosure stage you will be able to find information on the home at the office of the County Clerk. You should discover where the default notices are filed and find out how to find pending foreclosure sales.

There are some clerk offices that will have foreclosures on a web page. You might be able to ask the County Clerk’s office to put your home or e-mail address be placed on the list to be notified of pending foreclosures. Title companies may also be able to help you with finding foreclosures because they provide information in exchange for potential business prospects.

The actual foreclosure process will be different depending on which state you live in. This will depend on if you state is a title state or lien state. This will help determine whether the foreclosure is non judicial or judicial.

A post-foreclosure is the last step in the foreclosure procedure. At this point, the lender has taken over the home. The home will either be sold at auction to an investor or new home owner or is on the books of the bank’s real estate department.

You should check the notice of foreclosure to find the name of the bank and what is owed on the home. Lenders and banks are eager to sell these homes because having a foreclosed home on their books shows poor decision making on behalf of the bank. Banks take a big loss on foreclosed homes and they end up being responsible for maintaining the property and they may have to pay fees for the management of the property.

A real estate investor should be aware of the stages of foreclosure and plan accordingly.