Foreclosure Properties Auctions Questions AnswersWhat should I do if I’m interested in investing in some foreclosure properties?
Foreclosure properties from bank auctions or foreclosure sales offer some of the best opportunities for real estate bargains. If you are interested in investing, you should get up-to-date property lists and auction information on available properties. Next, check out any properties that interest you. Drive by the property, inspect its condition at open house, talk to some neighbors, and even bring a contractor with you for some advice on the house’s condition.
Before heading to the auction, you may want to get pre-approval on a mortgage loan to facilitate the transfer process should you win the auction. Make sure you bring the required deposit monies, proper ID documentation, and necessary tax documents. Check with each auction site or location for what you should bring. You may also opt to bring a real estate broker or agent to advise you; auctions will usually pay a commission to these brokers as long as they register ahead of time and help you through the property title transfer process.
What is the difference between Pre-Foreclosure, Foreclosure, and Bank-Owned (REO) types of real estate sales?
There are three types of bargain opportunities for foreclosure homes and properties:
Pre-Foreclosure (aka NOD or LIS) sale involves a buyer approaching to buy a property outright from the current owner and loan borrower. It allows the current owner to avoid foreclosure and the bad mark on his credit report, and allows prospective buyers to get great deals
Foreclosure Auction (aka NTS or NFS) happens if the loan goes to foreclosure and a trustee is entrusted to sell the property so that the loan lender can recover some money. Prospective buyers have short periods of time in which to review and inspect the properties and usually must pay cash or have pre-approval from loan companies. Foreclosure auctions are a great opportunity for a bargain, and buyers don’t have to deal directly with an owner facing foreclosure.
Bank-Owned (aka REO) sales will happen when a lender agrees with the owner facing foreclosure that the lender will take control of the property and sell it, or when a trustee fails to sell the property in a foreclosure sale. In these cases, the lenders will sell the property themselves. Although opportunities for incredible bargains are much more rare in these cases, they still offer some chance for some great deals.
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