Foreclosure Mortgage & Equity

How Does A Real Estate Foreclosure Auction Work?

If you’ve heard about getting a house at a bargain basement price with real estate foreclosure auctions, you heard right. However, you do have to know what you’re getting yourself in for. Never buy a home from a real estate foreclosure auction that you haven’t inspected yourself AND had a hired home inspector go through. The main thing to keep in mind with any kind of real estate auction is that once that gavel hits, the home is yours – for better or for worse.

Caution! You Marry The House

You should treat a real estate foreclosure auction more seriously than you would in selecting a marriage partner. Getting divorced is a heck of a lot easier than trying to unload a house you don’t like – especially in today’s tight economic climate. That property becomes more involved with your life than a spouse ever would. It might even wind up taking over your life – in ways both good and bad.

Just like in marrying a person, when you “marry” a house, you also take on not just the house, but any issues that come with the house. Part of your inspection into a house on a real estate tax foreclosure auction should include how much back tax or any other fees are owed on it. You will then be responsible to pay all of those off – even though they were run up by the previous owner.

Check the Auction Details

Be sure you check with the laws about real estate foreclosure auctions before bidding. Some states will require that the house must be paid for in cash at the auction. And then some counties within your state will have differing rules. Some will also have specific real estate tax foreclosure property laws, whether you are buying a home to live in it or as an investment.

Other than the huge amount of money involved, the actual auction is very much like a livestock auction. Everyone’s in place and raises their hands or signs to make a bid. Be sure you know in advance how much a bid is. For some auctions, it’s $1000, for others it’s $5000. The bank that owns the home usually makes the first bid, even though they don’t want to keep the home.

Other fees you need to find out about before the real estate foreclosure auction includes the cost of title transfer fees, document stamps and the auction fee. And also, you have to keep in mind that a mortgage does not come with the house.

Finding A Quality Foreclosure Property Listing

With the recent down turn of the real estate market many astute investors are turning towards investing in foreclosure properties in an attempt to find a way to make quick money. While in some cases this may work, finding a quality foreclosure property listing is not an easy task.

What To Look For When Selecting A Foreclosure Property Listing

The first thing you want look at are any pictures of the property.  These should be prominently shown in any quality foreclosure property listing.  While a photo will not tell you right off the bat whether you should invest in a property, but it can let you know if you should not.  Before even going out on site to look at a foreclosure property listing make sure that you get a picture even if there is not one in the listing.

Recommended Resource: Government Auctions.org

The next thing you want to look for in a foreclosure property listing is who the broker who is handling it is.  This will give you an idea of what you can expect from the property as brokers will generally specialize.  Pick a broker and look at several properties that they have to offer so that when you go out you can examine many properties at once.  This is the best way to maximize your time and canvas as many different properties as you can.  In addition you are going to want to find foreclosure property listings that are close to each other.  This strategy also helps to maximize the potential of your property as just about anything in the home can be fixed or changed except the location.  A good location is the best way to maximize the amount of money you can make.

Next you want to see whether the property is a HUD foreclosure or not.  HUD homes are generally very cheap but will require a lot of work to get back into a sellable form.  I would only look at a foreclosure property listing that is classified as a HUD property if you are prepared to do a lot of work.   This is not to say that these properties are not worthwhile investments, but rather that they will require a lot more work than a non HUD home.

There are many other things that you want to look at before purchasing a foreclosure property listing.  These guide lines are a good place to start, but you will need to decide for yourself what is and is not a worthwhile property to look at.

All About The Foreclosure Refinance

When it comes to being behind on the mortgage payment, there is nothing worse because your home is the biggest bill you have and the one that is probably the most important. So when you are not able to pay the mortgage company, you are probably not able to pay a lot of other companies. This means that your credit has taken a huge hit and you are probably getting collection calls left and right from people who want their money and they want it now. If you do not have the cash on hand to bring your account up to date, then a foreclosure refinance may be your best option.

A foreclosure refinance is where you get your loan refinanced while you are in the middle of a foreclosure process. Luckily, laws allow for homeowners to seek that option of foreclosure financing in order to help save their home. A foreclosure refinance is not going to be cheap though and there is probably going to be some up front money that will be needed to close the loan. Also keep in mind that your interest rates are not going to be all that great when doing a foreclosure refinance. Due to these factors refinance should be opted as way to stop foreclosure only after careful consideration.

How to Get the Foreclosure Refinance?

The best thing to do is to start calling around in order to see who can help you with a foreclosure refinance and what it is going to cost you out of pocket. Once that is said and done make sure that you are comparing interest rates that are being offered to you. Keep in mind that because of the hits on your credit for non-payment, you are not going to be offered the best rates out there but you still can be careful with what you sign for. A foreclosure refinance does not mean that you have to be taken advantage of.

And when you finally decide it is time to start looking for a foreclosure refinance you need to make sure what time limit you have. Depending on the state your home is in is going to determine how much time you truly have. A foreclosure refinance could take a little bit of time so you have to make sure that you have that time to spare. You certainly do not want to go through all of this just to have the house taken away at a foreclosure sale and you went through all of that time and trouble for nothing.

Why Investing In Commercial Real Estate Foreclosures Is Risky Business?

If you are one of those forward thinking people out there that are trying to capitalize on the recent down turn in the real estate market, then you probably have been looking into foreclosures as a fast way to make a buck. For home foreclosure listings this can most definitely be the case, but a commercial real estate foreclosure offers a bit more of a challenge.

Why a Commercial Real Estate Foreclosure Is Risky

There are several factors that make investing in a commercial real estate foreclosure very risky. The first reason is that when you compare commercial real estate and home real estate you really are looking at two completely different categories of property ownership. In residential real estate, primarily it is used as a home and not a place of business. In commercial real estate, it is wholly dedicated to business. Now if the property is a commercial real estate foreclosure, then you can bet that whatever business was located there failed and more than likely there is a reason for this. If the reason for the failure has not changed and you are looking at an investment opportunity in the commercial real estate foreclosure, then you need to think long and hard about what you are getting yourself into. I would be especially leery of any commercial real estate foreclosure that looks too good to be true because more than likely it is.

The next reason you want to be very careful of a commercial real estate foreclosure property is there probably was not anyone every living there. At least with a residence you can assume that any damage caused by the people could only be so much as they were living in the property, this is completely not the case with a commercial property. Years and years of neglect and misuse could be hiding in the establishment as the owner tried fruitlessly to use all his money to keep the business a float. Obviously since the commercial real estate foreclosure is in effect this was not successful, and you can bet that the previous owner stripped everything he possibly could out of the property.

It is for these reasons I would be really careful before plunking down my hard earned cash on a commercial real estate foreclosure. You may think otherwise, but I advise caution. In the end the decision is up to you, whichever way you decide do your research completely.

How To Help Stop Foreclosure With Little Or No Money

When you are facing foreclosure it can sometimes seem like you have no where to turn and nobody you can talk to. Many people will advise that you hire expensive lawyers and you know that if you could afford to do that then you would be making your mortgage payments and you would not be dealing with foreclosure. You can help stop foreclosure with free foreclosure help available to anyone that may be staring foreclosure in the face. When you are looking to help stop foreclosure you can become desperate but the best thing to do when you are trying to figure out how to stop foreclosure is to keep your cool and explore all of your options. Probably the best free advice you could ever get to help stop foreclosure is to not panic and make sure that you have tried absolutely everything prior to throwing in the towel and abandoning your dream home. Remember that the bank does not want your home, they want you to keep it and pay for it, so they would be more than happy to help stop foreclosure if they could. You could try and talk to your bank about your situation and see if they have any ways to help stop foreclosure but if that fails you do have options.

The first thing you need to keep in mind is that there are a lot of sick people out there and there are a lot of criminals and con artists that will try and steal what little you have left. So before you give out your personal information to any organization always check them out with the Better Business Bureau and any other government agency that you can find. Unfortunately people that help stop foreclosure are experiencing a growth spurt in their business and that means that there are criminals out there waiting to capitalize on that. You already have enough problems so don’t let yourself become a scam victim as well.

Working With Your Loan

There are organizations out there that are designed to help stop foreclosure by working within the legal parameters of your mortgage. Each mortgage is in some way regulated by the government and there are rules that apply to every mortgage. These mortgage modification companies will talk with you for no charge, listen to your situation, and give you advice on what kind of options you have. Sometimes you can help stop foreclosure by a few simple and free steps. Other times it can cost money and resources but the advice is free and you can at least find out where you stand.

What To Know About Foreclosure Credit Aftermath

When it comes to a person’s home, there is nothing worse then having to walk away from it knowing that you were not able to keep up the payments. Some times it is the poor decisions of the homeowner that lead to this terrible situation but other times it is simply something completely out of their hands that messed up their entire financial situation. Either case, having your home taken away is never a good feeling and the fear of the foreclosure credit aftermath is enough to make a person sick.

But unfortunately, there are foreclosure laws that protect the bank and their property so you would have absolutely no choice but to give up the home if you are not able to keep up the payments. But when it comes to the foreclosure credit aftermath, you may be relieved to find that there are plenty of people out there buying another home after a foreclosure. If you can prove yourself with your credit on other things and you can prove a history of steady income you can always find yourself in another home. But the foreclosure credit aftermath will mean that you should be looking at a year or two before you should look to purchase again.

Steps To Rebuild Credit

When you are stuck trying to rebuild your name after a foreclosure credit hit on your records, it is important to remember that you are going to have to take things slow at first. It is a good idea to try and avoid buying a house right away because you have a very good chance of getting turned down. Even if you were approved, the foreclosure credit hit is going to make your interest rate extremely high, which could just end up putting you in another bad spot down the road. You need to make sure that you make better financial choices this time around by making sure you sign only for a fixed rate loan and that you watch how much you are spending on the new home.

Take the next year or two after the foreclosure credit hit to rebuild your credit, pay some things off, and re-establish yourself as someone that a bank can trust again. It is not that your foreclosure credit hit is going to haunt you for the rest of your life but it will be on your credit for the next seven years. You are going to have to take the steps needed to get your personal affairs back in order so that you can again enjoy the benefits of being a homeowner.

It Helps To Know The Foreclosure Laws

If you are having trouble maintaining your mortgage payments, you need to start doing some research on the foreclosure laws for your particular state. Understand that every state is different when it comes to the foreclosure laws and how the foreclosure loans are handled. Your best bet to fight and win this battle is to have yourself armed with information so that you can go in knowing what to expect. The people who are completely unprepared are usually the ones that end up walking away from their homes.

When it comes to foreclosure laws, many people automatically assume that as soon as the foreclosure process starts that it is a done deal but that certainly is not the case at all. The foreclosure process may begin rather quickly but depending on the state that you live it, the entire thing may take anywhere from three to twenty four months. During the process, foreclosure laws do allow you to come out of the foreclosure process if you are able to bring your payments up to date and pay any outstanding legal fees that came as a result from the foreclosure process being started.

Other Options Are Out There

If you are unable to bring your mortgage loan completely up to date, companies are allowed to work with you and make payment arrangements as foreclosure laws allow them to do this. But something to keep in mind is that the foreclosure laws do not demand that mortgage companies offer such repayment plans to you. So it is completely up to your individual mortgage company on whether or not they offer some sort of resolution for you to work on. If they are not willing or able to help you with a repayment plan or something to that effect, you do have two other options.

Foreclosure laws allow the homeowners to place their home on the market and sale it as long as the closing date is prior to the sheriff sale. Keep in mind though that your new payoff is going to reflect outstanding attorney’s fees and filing fees that resulted from the foreclosure. Foreclosure laws allow the mortgage companies to get that money back from you for the fees they have to pay out. If you do not want to sell the home you could always try to refinance but you may find that hard with your credit being affected by the non-payments to your current mortgage company.

When a home foreclosure takes place, the seller who has taken the home back wants to sell it as soon as possible in order to make up the money that they are owed on it. Therefore, you can get a great deal on a home if you attend a foreclosure auction, which is a type of auction that is held specifically for selling foreclosed homes.

Pros and Cons of Foreclosure Auction

Before you go to a foreclosure auction yourself, you are going to want to learn about the pros and cons of doing so. Keep in mind that lots of savvy home buyers want to hit the jackpot by going with a foreclosed home, but that you can actually end up paying more if you do not go about it in the right way.

Also, it is not unusual for foreclosure auction homes to receive 20 or more offers, and so you may have to bid on quite a few before you actually get one.

One of the first things you should do if you are trying to buy a foreclosure auction home is get the property history. You want to ask your buyer’s agent to find out the bank’s purchase price on the Trustee’s Deed or Sheriff’s Deed. Generally it is noted on the document itself, which you can get from the tax rolls or a title company.

Make sure that you look at the amount of loans that were once secured to the property, and somewhere between the original mortgage balance and the foreclosure sale price, will be the amount that the bank will accept.

Another important step to buying a foreclosure auction home is to determine comparable sales. In many cases, the list price has little bearing on the value of the home and the market value carries the most weight. If you are up against competing offers, there will be other buyers who will offer more than list price.

You should always ask about the number of offers on any particular home, and if there are no offers on it you will probably be able to get away with offering less than the list price and still getting your offer accepted. On the other hand, if it has quite a few bids on it as most of these homes do, then you may want to make a cash offer, because banks like all cash offers.

As long as you keep these helpful tips in mind you will be able to have great success in finding and purchasing a foreclosure home.

You’d have to be living under the rocks, not to be moved by the foreclosure stories in the press, on television and maybe even in your own neighborhood. Americans in particular find their identity through their homes. Although a house does not make a home, any kind of foreclosure can drive a person crazy. This is now the best and worst times for real estate foreclosure investing.

Sticks And Stones

It is recommended that you keep your enthusiasm for real estate foreclosure investing to an absolute minimum. Although there is nothing illegal in real estate foreclosure investing, the current American recession has made the general public very easily angered. The general public looks at the turmoil, weeping and destruction around a simple HUD foreclosure home and then assumes that you are a heartless Scrooge for being into real estate foreclosure investing.

The best thing you can do in this situation is not to argue back. You quietly do the best you can with the foreclosure property that’s fallen into your lap and turn it onto a home for someone. If you believe in a God of some sort, than you can pray for the people who were kicked out of the home you now own. By giving generously to homeless shelters and Habitat for Humanity, you also prove that you are putting your money back into the community and not just in your pocket.

Trust In Allah, But Tie Up Your Camel

It also is a sad fact that some people are trying to take revenge in any way they can on anyone who takes possession of their former home. On the morning of this writing (July 24, 2008) a Massachusetts woman committed suicide in a foreclosed home that was going under auction.

It has been suggested by housing experts that as the America housing crisis grows, so will the revenge patterns. Homemade bombs are being found, tons of pets locked in a home to die of starvation and someone leaving a ten foot alligator with attitude has also occurred. In this day and age, you need to keep your identity a secret and get a good security system for your home.

You need to keep your guard up about strangers coming around your house, calling your or offering business proposals. You need to educate everyone in your family not to talk to strangers, or let a strange person in the home. Even though you might trust that no one will so crazy as to try to hurt you over real estate foreclosure investing, you never know. As the old saying goes, "Trust in Allah, but tie up your camel.

Government Home Foreclosure May Offer Best Deals

Possibly some of the best deals on real estate are available with a government home foreclosure, as most entities are more willing to sell the property for any amount of money it is owed on the home. Past due income taxes, property taxes, bankruptcy and even court fees and fines can be grounds for a government home foreclosure as they take possession of the property in order to recoup money owed to the government. Still, selling homes at near the fair market value is one of the goals in home sales of this type.

Reading the classified ads can often give details about government home foreclosure sales, typically performed at a public auction. The property is also usually open for inspection prior to the home foreclosure auction and enough time is given for potential buyers to research the true value of the property as well as adjacent properties before bidding. It pays to thoroughly research the property as, in some instances, there may be costs hidden in purchasing from a government home foreclosure sale that do not come apparent until after the deal is made.

There have been many movies in which the land owner was able to come up with the taxes they owed just as the property was going to auction and with government home foreclosure properties, this is an accurate depiction. The owner has until the time of the sale in which to make good on their debt to remove the property from the auction block.

Reasons Vary For Homeowners’ Loss

There are a variety of reasons a government home foreclosure sale will take place and the reason for the sale will also help determine any minimum bid accepted for the property. If there is no mortgage on a property that has been put up for auction based on past due taxes, usually the government only wants that amount, plus the administrative costs of the government home foreclosure and sale.

In these instances, homes can be purchased sometimes for pennies on the dollar of value while the homeowner’s debt is settled with the government. Some government agencies may have guaranteed the loan to a lender and once the property is foreclosed upon, the government will pay the lender the guaranteed amount and put the property up for sale at a government home foreclosure auction, with the minimum acceptable bid being what is owed. Typically, these properties will not sell for less than two-thirds of the home’s value.