How to buy foreclosure property

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How to buy foreclosure property:

Overview

Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice. The foreclosure process can end one of four ways:

The borrower/owner pays off the default amount to reinstate the loan during a grace period known as pre-foreclosure.

The borrower/owner sells the property to a third party during pre-foreclosure, allowing the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.

A third party buys the property at a public auction at the end of the pre-foreclosure period.

The lender takes ownership of the property, usually with the intent to re-sell. The lender can take ownership through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction.

Foreclosure Buying Opportunities

The foreclosure process offers three bargain-buying opportunities, represented by three different property statuses:

Buying during pre-foreclosure (NOD, LIS)
Buying at public auction (NTS, NFS)
Buying bank-owned properties (REO)

Ready to Buy?

Once you've identified the property you wish to purchase, we'll sit down and go over the terms you wish to offer to the lender. During the contract writing process, we'll go over the entire contract so you'll have a complete understanding of what you are signing. We'll prepare your Sales Contract, any addendums necessary, contingencies, etc. You will need to have an "Earnest Money Deposit. This "Earnest Money" deposit is your "guarantee" that you will perform your contractural duties to purchase the property under the terms and conditions outlined in the contract. Generally lenders want a minimum of 1% to 3% of the sale price to hold. You will also need your lender's pre-approval letter to submit with your contract.

Once we have everything ready, contract written and signed, addendums completed and signed, checks and approval letters, we'll submit your offer to the lender. Be prepared to wait a couple of days for an answer. The lender must review the contract and the appropriate managers must sign-off on the contract.

You've got a contract - and we now must proceed to complete everything according to the terms of the contract. We'll arrange for title examinations, appraisals, coordinate the closing ...

Your real estate agent will help you through the entire process - and ensure a smooth transaction.