locate legitimate Foreclosure or Default properties
Homes that have been foreclosed upon typically sell for a lower price than a comparable, non-foreclosure home at market price. Once Foreclosure has taken place, the lender takes possession of the property and most often has no current use for the property and therefore is considered a financial burden due to maintenance and upkeep of the property. In most cases, the lender has multiple properties and is motivated to sell as quickly as possible. Negotiating the purchase of a foreclosed or default property can take place at a below-market rate mortgage, closing costs and all other funds can also be put into the pot before agreeing to purchase.
Instructions
1. Research:
With a little leg-work, due diligence, and determination you can locate foreclosed properties through a number of resources without having to pay third-party fees.
Listings can be obtained through your county sheriff's office. When listings are still in the local paper, they are still considered in pre-foreclosure status. You can also obtain foreclosed properties through county auctions and sheriff sales. If the auctioned property is not sold at the time of the auction, the property is then transferred to the lender to manage selling the property. A lender would be a bank or other financial institution that offers mortgages for properties. After foreclosure has taken place on the property, the property is then referred to as REO Properties. You can contact locate REO properties through most financial institutions that offer mortgages. The company's REO listing may or may not be available online, however you can always go to the local institution to see what they have to offer.
2. Educate Yourself:
If you are also interested in buying and selling REOs as a business or investments see Real Estate Educate (http://www.realestateeducate.com/course/courses.php) offers online real estate courses for licensing as well as REO agent training. They also offer the courses necessary to be an REO agent who specializes in foreclosed properties for financial institutions.
3. Short Sales:
Another option for obtaining default properties would be through short sales. A Short Sale is the selling of a property for less than is owed on the mortgage or combined mortgages with the Bank's Approval. In the event the buys is unable to obtain a loan modification and just need to get out of the house all together, a short sale would be an option before foreclosure takes place. The short sale process takes a lot of time as the home still has to sell in this Buyer's Market.
Because Banks are not willing to take a loss on their investment, buyers required to qualify for a short sale. Qualifications include (1) The Market Value has dropped and the property is worth less than the unpaid balance of the mortgage. A licensed appraiser can give you a good determination of value (2) In Default or Near Default (3) Seller has no assets (4) or legitimate hardship. Considering the seller is able to provide the necessary documentation for the short sale (1) Hardship Letter (2) 2 Most recent bank statements (3) Recent pay stubs (4) Listing Agreement with a real estate office (5) HUD-1 Net sheet (6) 6 month profit and loss statement or something that shows expenses, the process can take anywhere from 60 to 120+ days. There is no system to fast-track the process.
4. Examples of Hardship:
(1) Unemployment or Loss of Income or Reduction of Income (2) Divorce or Separation (3) Medical Emergency (4) Illness (5) Bankruptcy (6) Death of Spouse or Co-borrower (7) Short or Long Term Disability (8) Failed business (9) Job Relocation (10) Military Duty.
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