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What does "foreclosure" mean?
"Foreclosure" means a deed holder (typically the lender) has taken legal ownership
of the property most likely due to non payment of a mortgage. The actual
foreclosure occurs on or about the auction day when the property being foreclosed
on is auctioned off. If no one bids higher than the minimum bid amount then the
deed holder, typically a bank, becomes the new owner of the property at the
amount of money that they were owed.
The time frame from a home owner not paying their mortgage and the actual
foreclosure date can be between 6-10 months, depending on various factors.
How do I buy a foreclosure?
Foreclosures can be bought in a number of ways:
1) REAL AUCTION: The first opportunity to buy a property that is truly a
"foreclosure" is at the initial foreclosure auction at or on the county court house
steps. This is where the deed holder takes possession unless there is a qualified
bidder bidding above the minimum bid price, this amount is typically the amount
owed to the lender, but also subject to any other debts (property taxes, senior
lenders, etc..). This method generally requires some cash liquidity and deposits, but
is free of "Auction House Fees".
2) AUCTION HOUSE: An after foreclosure auction whereby an auction house
auctions off homes previously foreclosed on by deed holders. This method
generally has a +/- 5% buyers fee associated with a purchase. Sometimes auctions
also contain developer inventory in addition to properties owned by banks. These
are the fast talking events you see advertised on tv where they claim "homes can
be bought for $1,000".
3) ON THE MLS: Most of the homes foreclosed on by banks are listed for sale along
side all the other homes listed for sale in that area. These homes are sold in a more
typical resale fashion with inspection time frame allotments, refundable buyer
deposits, and generally more time to look the property over.
What are the pros and cons of buying a foreclosure?
The cons of buying a foreclosure are that they are sold in "as-is" condition. This
leaves a buyer with limited recourse should something go wrong. One way to
counter this issue is to buy homes less than 10 years old which should still have
builder warranties in place.
Other than that, a foreclosure property is generally no better or worse than any
other property. There may be some that are in poor condition, but they will sell at
the appropriate price for their condition, just like any other property.
The pros of buying a foreclosure are generally limited to the purchase price.
Because of the "as is" nature of the sale, and the fact that lenders want to sell their
properties quicker the price often reflects this.
Additionally, Investor looking for "rehab's" or long term rentals can often find
properties in the foreclosure market in need of repairs or that have value added
opportunities.
What's an insiders view on foreclosures?
The current foreclosure market offers good pricing that meets fundamental
guidelines for buying real estate. The most likely market to find the right home is
through the MLS.
Most "REAL AUCTION" auctions as described above don't provide any opportunities
in today's market. This is because most of the minimum bid amounts are higher
than the property's current value. Essentially they have negative equity and the
auction price is to high versus the property's current real market value.
The "AUCTION HOUSE" events are more marketing and hype than good deals.
Especially once you add in the buyers premium, or whatever name the "fees" that
are charged to the buyer are being called at a particular auction. That's not to say
you can find good values, but definitely beware.
The San Diego MLS currently has over 1,000 bank owned foreclosures for sale in
San Diego County. The vast majority of foreclosures will be sold through the MLS
as lenders seek closer to market values for their foreclosure inventory of homes.
The current market dynamics heavily favor finding the best deal through the MLS.
The county court house auctions will become popular once home values rise and
99% of the auctions aren't negative equity situations.
How can I find and purchase a foreclosure?
See also: How to get the best deal
It's simple really, contact us. We work hard ever day in the distressed properties
market in San Diego. We are on top of the real estate and finance market, and look
forward to utilizing our time, resources, and experience towards finding you the right
property.
Tell us everything you know about your situation and we will provide you with the
best course of action to achieve your goal in the time frame you want to achieve it.
The more we know the better.
"Foreclosure" means a deed holder (typically the lender) has taken legal ownership
of the property most likely due to non payment of a mortgage. The actual
foreclosure occurs on or about the auction day when the property being foreclosed
on is auctioned off. If no one bids higher than the minimum bid amount then the
deed holder, typically a bank, becomes the new owner of the property at the
amount of money that they were owed.
The time frame from a home owner not paying their mortgage and the actual
foreclosure date can be between 6-10 months, depending on various factors.
How do I buy a foreclosure?
Foreclosures can be bought in a number of ways:
1) REAL AUCTION: The first opportunity to buy a property that is truly a
"foreclosure" is at the initial foreclosure auction at or on the county court house
steps. This is where the deed holder takes possession unless there is a qualified
bidder bidding above the minimum bid price, this amount is typically the amount
owed to the lender, but also subject to any other debts (property taxes, senior
lenders, etc..). This method generally requires some cash liquidity and deposits, but
is free of "Auction House Fees".
2) AUCTION HOUSE: An after foreclosure auction whereby an auction house
auctions off homes previously foreclosed on by deed holders. This method
generally has a +/- 5% buyers fee associated with a purchase. Sometimes auctions
also contain developer inventory in addition to properties owned by banks. These
are the fast talking events you see advertised on tv where they claim "homes can
be bought for $1,000".
3) ON THE MLS: Most of the homes foreclosed on by banks are listed for sale along
side all the other homes listed for sale in that area. These homes are sold in a more
typical resale fashion with inspection time frame allotments, refundable buyer
deposits, and generally more time to look the property over.
What are the pros and cons of buying a foreclosure?
The cons of buying a foreclosure are that they are sold in "as-is" condition. This
leaves a buyer with limited recourse should something go wrong. One way to
counter this issue is to buy homes less than 10 years old which should still have
builder warranties in place.
Other than that, a foreclosure property is generally no better or worse than any
other property. There may be some that are in poor condition, but they will sell at
the appropriate price for their condition, just like any other property.
The pros of buying a foreclosure are generally limited to the purchase price.
Because of the "as is" nature of the sale, and the fact that lenders want to sell their
properties quicker the price often reflects this.
Additionally, Investor looking for "rehab's" or long term rentals can often find
properties in the foreclosure market in need of repairs or that have value added
opportunities.
What's an insiders view on foreclosures?
The current foreclosure market offers good pricing that meets fundamental
guidelines for buying real estate. The most likely market to find the right home is
through the MLS.
Most "REAL AUCTION" auctions as described above don't provide any opportunities
in today's market. This is because most of the minimum bid amounts are higher
than the property's current value. Essentially they have negative equity and the
auction price is to high versus the property's current real market value.
The "AUCTION HOUSE" events are more marketing and hype than good deals.
Especially once you add in the buyers premium, or whatever name the "fees" that
are charged to the buyer are being called at a particular auction. That's not to say
you can find good values, but definitely beware.
The San Diego MLS currently has over 1,000 bank owned foreclosures for sale in
San Diego County. The vast majority of foreclosures will be sold through the MLS
as lenders seek closer to market values for their foreclosure inventory of homes.
The current market dynamics heavily favor finding the best deal through the MLS.
The county court house auctions will become popular once home values rise and
99% of the auctions aren't negative equity situations.
How can I find and purchase a foreclosure?
See also: How to get the best deal
It's simple really, contact us. We work hard ever day in the distressed properties
market in San Diego. We are on top of the real estate and finance market, and look
forward to utilizing our time, resources, and experience towards finding you the right
property.
Tell us everything you know about your situation and we will provide you with the
best course of action to achieve your goal in the time frame you want to achieve it.
The more we know the better.
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Low Income Assistance
Understanding Your Loan
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Real World Situations
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