Foreclosure is the process of a mortgage company taking possession of a property because of a
failure of the mortgagor to maintain positive payments. It's a sad truth that, though most home
owner's wish to avoid foreclosure, foreclosures still happen. Despite a home owner's best efforts
they can still end up having to foreclose on a home, potentially losing all their equity and
damaging their credit while having to find a new place to live.
For investors, the property can usually be bought at a better price than if processed through a
traditional sale. During the foreclosure process, time and certainty of a sale are much more
important since the seller is looking to recoup as much from their unmanageable property as
possible. As difficult as it can be for the seller, it can prove to be a mutually beneficial sale
if an investor comes along during the right stage of the foreclosure.
The three stages of foreclosure are: pre-foreclosure, foreclosure, and post-foreclosure.
Pre-Foreclosure Phase
The pre-foreclosure phase is when an investor is able to do the most good for a distressed
home-owner. In this stage, if an investor is able to quickly reach a price that is agreeable,
then the house can be sold with most of the distressed home-owner's credit rating intact. Ideally
if an investor is buying a home during this phase they needn't involve the lender, just interact
directly with the home owner. An investor's best chance to find property in this stage is through
real estate agents, accountants, attorneys or through basic word of mouth such as colleagues and
friends who may know the homeowner.
Foreclosure Phase
This is the actual foreclosure itself. This is the best time for investors to strike but does not
allow for as much help to the home owner. Most of these types of properties will be found through
the County Clerk's office. This is where the investors can look up recent notice of defaults so
they are aware of any pending foreclosures in the area. You can also sometimes be placed on a
notice list to inform you of any pending defaults as they happen.
Depending on the state the foreclosure process is different. A judicial foreclosure can take much
longer then a non-judicial foreclosure which is usually ready to go to auction after two to four
months. No matter how they get there once they are finished processing they will be sold at the
auction to whoever is the highest bidder.
Post Foreclosure
You can attempt to buy a house when it is in the post-foreclosure process. You will be able to
look up the new owner and how much they paid for the foreclosure notice. This is when the
property has either been sold to an investor at auction or it is being held by the lender, which
is known as a REO (Real Estate Owned). An investor will usually be a tougher buy when they bought
during the foreclosure part of the process but they might still be willing to sell so they can
have a quick property sale. If the house is lender owned you are usually able to negotiate more
because they would just rather recoup their losses and get the house off of their balance sheets.
Hopefully knowing these distinctions will allow you to better understand the steps to selling a
house or investing through foreclosure. It can be a tricky process at first, but if handled with
care the foreclosure process can present a unique opportunity to either make a profit as well as
help out distressed home owners.
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Let us help you if you are in a tough spot and need to sell your home quickly. We can buy all
types of homes and we might be interested in buying your home. Skip the headaches of a tradtional
home sale and let us buy your house.
http://www.sellmyhousenowseattle.com/tag/how-to-sell-a-house-in-seattle/
Posted by Randall Frier http://jrandallfrier.com/
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