Monthly Archives: September 2011

Sep 26

What is Pre-Foreclosure?

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It’s a sad fact, but many Americans lose their homes to foreclosure every year.  Some lenders aren’t always diligent enough in checking a person’s ability to make repayments, and others don’t really care anyway.  And of course there are situations where a change in circumstances happens, leading to the homeowners being unable to meet their mortgage obligations.

Whatever the cause of a person getting behind on their mortgage payments, the process from that point onwards is fairly set.  Initially, the lender will file a public default notice.  This initiates the foreclosure process, and at this point the property officially enters the pre-foreclosure stage.

So basically, pre-foreclosure is like a grace period.  The homeowner is being warned that they’re in default and need to do something about it, but at this point, the lender is unable to claim back the property and sell it to recoup their costs.  The length of the grace period varies, as it’s determined by state laws.  Some states allow the grace period to last for as long as 6 months, but many states have shorter periods.

Once the property enters pre-foreclosure, there are a number of ways the homeowner can avoid having their property foreclosed on and sold by the lender.

Pay Off The Default

If the homeowner can find the money to pay off the default amount, then the property is removed from pre-foreclosure.  If the amount in default is small, and the default was caused by a temporary glitch in circumstances, then it may be worthwhile taking out a personal loan to repay the debt.  If the problem is ongoing, however, this may just cause more problems for the homeowner.

Sell The House

This is a little more drastic, but is probably the best solution if meeting the repayments is likely to be an ongoing problem.  By selling the house, the homeowner should be able to get a reasonable price for it.  If the homeowner waits and lets the lender sell it, the sale price is almost certainly going to be much lower, because the lender just wants to offload the property as fast as possible.

This is often a good time for an investor to approach the homeowner with a fair offer to purchase the property.  However, many people in pre-foreclosure go into denial, and instead of trying to make the best of a bad situation, will actually avoid taking action until it’s too late.  Many also don’t understand the long-term detrimental effect a foreclosure listing will have on their credit score.

Nobody wants to face foreclosure on their home, but at least the pre-foreclosure period gives the homeowner the opportunity to find a solution that’s a little more favorable for them.  Waiting for the property to pass into foreclosure and be seized by the lender is almost never the best option.

Sep 21

Foreclosure Listings

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So you are thinking of investing in property and you want to have a look and see what foreclosure properties are available. But looking for a foreclosure listing can either be simple or hard – it all depends if you know where to look. In this article we will look at the ways in which you can find a foreclosure listing which will hopefully help you to achieve your goal of becoming a property investor.

First let’s look at what type of listings exist.

Some of the list you may find will be called pre-foreclosure listings and this means that a property has been sanctioned for foreclosure proceedings but may not have actually been foreclosed as yet. This type of foreclosure allows a person time to carry out some investigations on the property in question so that they are able to make an informed decision on it prior to making a bid.

But another way to look at a pre-foreclosure listing is that notice has been provided and a foreclosure on the property is inevitable should the owner of the property take no action in order to settle the loan against it. Normally a pre-foreclosure period lasts for 30 days prior to a property becoming a foreclosure listing.

Most foreclosure listings can be found through a county announcement which is usually in the front section of the classifieds of the local paper for your area. Also realtors, banks, and other lending institutions will have foreclosures listings and you can do a search online as well.

But the key to finding a good foreclosure listing is to be patient as it may take some time to learn the ropes and know which listings are good to use and then how to make your foreclosure purchase. A lot of real estate agents have connections to lenders and they will be alerted by them of any properties that are put into pre-foreclosure. In some cases realtors will refer to a foreclosure listing as a fire sale.

However if you know of a reputable real estate agent that you can work with this might be the best way for you to check out all foreclosure listings. Some times these agents work like stock brokers and when they know of a property that is coming on to the market and is pre-foreclosure or a foreclosure listing they will alert you to it. Using this type of set up is a win win situation for both you and the real estate agent.

The final option is to subscribe to a foreclosure listing service online. This is a great way to save yourself some time, because all the hard work of finding foreclosure listings is done for you. All you need to do is check out the neighborhood you’re interested in. The good services charge a small fee, but when you consider how much you can make if you buy a property well below market value, that charge is minimal.

The end results no matter which option you decide to go with is that you will end up with a nice foreclosure listing to add to your property portfolio.

Sep 16

Foreclosures – How To Invest Successfully

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If someone is about to lose their home to foreclosure, then you can guarantee they’re feeling stressed.  They’re probably being bombarded by calls and letters from creditors, and for many people it all becomes too much to handle.  They close their eyes and hope it will all just go away.

Reality is that it won’t, and as an investor interested in buying foreclosures, the hardest part can be convincing the homeowner that they really are going to lose their house unless they do something about it.  It can also be difficult to convince them that you really are trying to help them, even though you are helping yourself make a profit at the same time.

When you’re dealing with foreclosures, time is of the utmost importance.  You need to have enough time to bail out the homeowner and take over the property before it’s too late.  That’s why it can be a good idea to subscribe to a foreclosure listing service – you get access to listings at the earliest possible time, and don’t have to use your valuable time looking for potential foreclosure properties from other sources.

Many people facing foreclosure have spoken to an attorney, and are convinced that bankruptcy is their only option.  In most cases this isn’t true, but attorneys tend to stick to what they’re familiar with, which is bankruptcy, rather than mentioning other possibilities such as:

- Sale by assumption
- Deed in lieu
- Straight sale
- Foreclosure presale
- Compromise sale
- Short payoff
- Workouts
- Assignment
- Injunctions

There are still more options than these, which shows that bankruptcy definitely isn’t the only choice for the homeowner.  When you’re dealing with a homeowner in foreclosure, make it clear that you’re offering an alternative to bankruptcy.  Find out whether they really understand what bankruptcy will do to their credit history and how it will affect their future.

If you’re serious about buying foreclosure properties, then you need to become familiar with everything that’s required in the process, and check everything for every property you consider.  These items include:

- Loan and mortgage documents
- Loan amount, monthly payment, and interest rate
- Any outstanding taxes
- Existing insurance policies
- Any other liens or judgments

Make sure you have enough information to complete all the necessary tasks before the foreclosure occurs.  If there’s not enough time, don’t even bother starting.  Having said that, learn as much as you can about ways to delay foreclosure, and help the homeowner to implement them all.  If may just give you enough time to take over the property before the foreclosure auction.

Above all, focus on creating a solution where everybody wins.  It’s never an easy time for the homeowner, so be prepared for plenty of anger, frustration and resentment – some of which may be directed at you.  Walk away if it’s obvious the person doesn’t want to work with you.  Find someone who is interested in finding a solution, show empathy for their situation, put together a strategy to get the best possible result for them, and before long you’ll find yourself with a good portfolio of investment properties.

Sep 13

Foreclosures: Not the Next Generation for Property Flippers

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The slowing real estate market in 2006 will provide the first real price opportunities for buyers for the first time in most American residential real estate markets. But don’t look for bargain basement prices on foreclosures. Several factors will keep foreclosure prices at points that might not be worth the additional risks involved with them. Experienced foreclosure buyers will still be in the market, and don’t underestimate their influence if you end up in a bidding war with them at a foreclosure auction.

Foreclosures come in three basic varieties. First there is the auction or trustee sale which happens after the property owner defaults on their mortgage and the mortgage holder or lender sells the property to the highest bidder at a public sale. The second are the Real Estate Owned or REO property that the lender owns after the owner defaults on their mortgage, the lender manages and sells the home through a traditional real estate agent. And finally there are HUD foreclosures who in turn auctions those properties whose loans have been guaranteed by the U.S. Department of Housing and Urban Development, online. Mark Nash author of 1001 Tips for Buying and Selling a Home offers tips on buying foreclosed properties in 2006.

-Learn how the redemption period can impact a foreclosure. In some states homeowners have the legal right to buy back their property within a state mandated period of time, even after its sold at auction.

-Investigate properties that are near foreclosure. Some investors pick up properties before they go into formal proceedings. These homeowners have fallen behind on mortgage payments but legal remedies have not been initiated by the bank or lender to seize the home. Contact homeowners with direct mail or telephone campaigns. Remember though that if using the telephone, some homeowners might be registered on national Do-Not-Call lists.

-Foreclosures eat away at banking profits. Even though many think that banks would want to liquidate troubled loans, they are not in the business of owning real estate. Many lenders will work diligently with borrowers to avoid the lengthy and costly process of foreclosure.

-Foreclosed homes are not always bargains. According to industry sources foreclosed properties don’t sell for significantly less than other homes in most U.S. markets. If your in a high demand market don’t expect steep discounts. Don’t forget to factor in major repairs and minor improvements that foreclosed homes need. If owners couldn’t pay the mortgage, they couldn’t afford the maintenance, and often trash the homes in retaliation.

-Experienced investors who understand the risks buy the majority of properties sight unseen at public auctions. Auctions though can be risky for first-time investors. Many new investors aren’t aware that along with the property price come the unpaid taxes, liens and second mortgages that they are required to pay to receive title. And evictions can also come with the property, now you’ve just become a landlord. Know and understand landlord-tenant laws in your state before jumping into a sight-unseen foreclosure auction.

-The Internet is a good resource for finding more information on foreclosures. Visit web sites that will offer you lists from public records of those behind on their mortgage payments, for a subscription price. Contact experienced real estate agents for an inside line to problem properties before they have legal entanglements.

-Don’ be afraid to knock on doors. It might be old-fashioned, but getting out and knocking on doors might be a way to learn first-hand about potential foreclosures. Develop ways to qualify problem homeowners by property condition and follow-up with a professional but helpful style.

-Retain an real estate attorney. Well worth the cost to trouble shoot the many legal hurdles to owning a foreclosure property.

Mark Nash’s fourth real estate book, “1001 Tips for Buying and Selling a Home” (2005), and working as a real estate broker in Chicago are the foundation for his consumer-centric real estate perspective which has been featured on ABC-TV, CBS The Early Show, Bloomberg TV, CNN-TV, Chicago Sun Times & Tribune, Fidelity Investor’s Weekly, Dow Jones Market Watch, MSNBC.com, The New York Times, Realty Times, Universal Press Syndicate and USA Today.

Sep 12

Foreclosure Investing: Deals – Find Them!

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Some people never accomplish their real estate investment goals because they think there are no good deals left.

That is absolutely NOT true. If you know where to look, you will soon realize that there are great opportunities in your area every day of the week.

Welcome to another installment of Matthew Griffin’s 7 Foreclosure Secrets. Be sure and look for others in the series at http://www.foreclosureprofitsnow.com/. While you’re there, check out all the other great educational materials that will help you succeed in real estate investing.

But for now, I’m going to tell you how to find great real estate deals at absolutely no charge to you. Why? Because if you’re like most people, you aren’t living the life of your dreams. The vast majority of people are under some type of financial pressure, or don’t have enough money put away for things like college or retirement. Is that you?

If it is, I have great news for you! Real estate investing can change your life. And one way for you to be a successful real estate investor is to know how to find great deals. Here’s how:

Legal notices. Properties that are in foreclosure are required to have their procedural details printed in the local newspaper and/or posted on a public bulletin board at the county courthouse. Because investing in foreclosure and pre-foreclosure properties can be so profitable, these notices are a great place for the savvy real estate investor to find their next great deal.
Banks, Brokers, Closing Attorneys. If you take the time to build positive business relationships and network with other real estate professionals, you will discover that they will be more than happy to refer deals to you. Simply let your colleagues know that you are a real estate investor who is interested in assisting property owners who are in foreclosure or pre-foreclosure. You may be very surprised at how many great deals you find simply by word-of-mouth.
County recorder’s office. Most people don’t understand that any legal proceeding involving a foreclosure or pre-foreclosure is a matter of public record. Any person can walk into their county recorder’s office and look for property information, tax liens, mortgage records, notices of trustee sale, and other indicators of residential property that might present a great deal for an investor. Take a little bit of time and visit your county courthouse; you could just walk out with the deal you’ve been looking for.
To be honest with you, there are great real estate investment deals everywhere. It doesn’t matter whether people think the local market is hot or cold; you can find the deals. You just have to know where to look.

To learn more about finding great deals, real estate investing in general, or other installments in the Matthew Griffin’s 7 Foreclosure Secrets series, be sure and visit http://www.foreclosureprofitsnow.com/. You’ll be glad you did.
Matthew Griffin

Sep 08

Purchasing Atlanta Foreclosures

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The Local Law

The local laws concerning Atlanta foreclosures are quite simple and take less than two months to complete in most cases; most of the proceedings are actually complete in about a month.  A listing must be made in the local news paper featuring the pertinent details of the property and the date, time, and location of sale, plus the owner of the property and the name of the lender.

Availability

There are thousands of Atlanta foreclosure properties available, in every size and style a person could want; there are savings available from twenty to fifty percent, and there are virtually no limits on the size or quality of the property.

Million dollar homes are available for purchase as readily as small one bedroom condos; Atlanta foreclosures are listed for sale as soon as the “Notice of Trustee Sale” is completed.  These early listings enable buyers to investigate the property and to bid on the property at the court house; bidding at the courthouse can lead to a lower price than purchasing from the highest bidder after the proceeding.

Places To Find Atlanta Foreclosures

Atlanta foreclosures must be listed in local paper for four consecutive weeks according to the Georgia state law; there for the local news paper is a good place to begin looking for foreclosed property.  There are also exclusive foreclosure publications and lists available at most locations which sell news papers and magazines.

The internet is full of sites which have foreclosure listings for the entire United States, and some which are even specific to Atlanta foreclosures; many of these internet sites will give limited information for free.

After the free information is received a membership fee is often required to view all the details of the Atlanta foreclosure; before the customer is required to pay the fee a free trial is often offered.  Potential customers should be aware that these free trials still require a credit card or banking account number; also that the service must be cancelled within the trial period to avoid charges to their credit card.

Many realtors also deal in foreclosed homes as well, either homes which were purchased as investments from a foreclosure proceeding or as defaulted property which they still retain the rights to.

Buying Atlanta foreclosures is a less expensive way to purchase a first home, investment property, or to upgrade a current home; some foreclosures can be had for little or no money down besides catching up the payments of the property.

Sep 06

Bank Foreclosures – How You Can Profit

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If you’re interested in making money from real estate, then you need to realize that bank foreclosed homes are coveted by investors, thanks to their high potential for profit. Bank foreclosed homes regularly sell at prices well below market value. You’ve probably heard the old saying ‘buy low, sell high’, and foreclosed properties are the perfect opportunity to do just that.

Basically, a bank forecloses on a home when the owners default on their mortgage payments. This doesn’t happen immediately, and it can take a number of months for the bank to go ahead with foreclosure proceedings. Once the foreclosure is finalized, the bank or lending institution is left as the owner of a house. As an investor, you are able to buy the property directly from the owner up until the point at which the foreclosure is final. Owners are generally keen to sell, so that they don’t end up with the black mark of foreclosure on their credit history. If there’s substantial equity in the property, you can make a good profit.

You don’t have to try and get in that quickly, however. Once the foreclosure is final, the house will be put up for sale, either by the lending institution or through an auction. The lender is keen to sell the foreclosed home for a variety of reasons, including:

- Banks don’t like a large inventory of foreclosed homes, it highlights bad lending decisions
- The lender wants to recoup their losses
- It costs too much – maintenance, insurance, taxes, security

Sometimes the lender will sell their foreclosed homes through a real estate auction. If you take the time to do your research, then you can really snap up some bargains at auction. But if you’re not careful, you could end up spending for more than you should, paying well above market value. So doing your homework prior to the auction is vital.

You should always thoroughly inspect a foreclosed home before you place a bid. Look at any repairs that might be required, and work out what they’re going to cost. Also work out how long it’s going to take you to have the house repaired and ready. If you can’t inspect the property for some reason, then always assume the worst, and allow a big margin for unknown expenses.

As more people become familiar with the idea of buying foreclosed homes, they are getting harder to find. It’s a good idea to have access to good foreclosure listings so you know what’s coming up and can act accordingly. You can get foreclosure lists from lending institutions, courthouses, government agencies, etc., but be aware that doing this can take a lot of time and resources.

It’s far more cost and time effective to sign up to an online foreclosed homes listing service, such as Seized Real Estate. You’ll get timely, accurate listings of bank foreclosed homes, so you can be first in line when it comes on the market. If you’re serious about buying foreclosures on an ongoing basis, then receiving accurate information is vital to your success, and worth the few dollars it costs to keep your finger on the pulse of the market.