Real Estate Blog - The Step between Short Sale and Foreclosure

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The Step between Short Sale and Foreclosure

For those who don't want to pursue a short sale, yet don't want to compete with the frenzied bidding that sometimes occurs with bank owned homes, in Arizona, there's an opportunity to pick up a home "at the courthouse steps."

If a home is headed to foreclosure, it will have to pass from personal ownership to bank ownership. The bank will first give the public an opportunity to bid on the home. Here are a few of the things to do:

Find out which properties will be available for auction and where.
Perform due diligence (title search, inspection, competition shopping).
Bring a $10,000 cashiers check to the auction.
"Pull" the property that you would like to bid on.
Bid against other interested parties.
Pay the full cash amount (minus the $10k already paid) by 5 PM the next day.

This method is best explored by those who a) have cash or b) have resources for quick interim financing and affordable final financing.

If you're interested in this process but would like someone to assist you, there are several organizations that will help you for a fee.

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Why would you want to do this?

Of the several hundred homes that go to foreclosure each day, many of them will be sold at a significant discount. If done correctly, such homes can be purchased well below the existing home prices in the neighborhood (which includes bank owned properties). We have clients and associates who are purchasing homes at 20 to 40 percent below market. It's not rocket science- just math and legwork. If you'd like to know more, just let me know.

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Chuck Willman assists people in their search for Arizona investment properties. www.AZvest.com

Posted by Chuck Willman, Arizona Realtor® 480.292.0600 on 02/07/2009 08:45 PM

Comments (9)

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Originally posted at: Arizona Real Estate Specialists: The Step between Short Sale and Foreclosure

Post is included in group: Investment Intelligence
Post is included in group: Investing in Real Estate
Post is included in group: Arizona Homes

9 Comments on The Step between Short Sale and Foreclosure

FEB

Are you seeing Credibids finally coming down to the point where going to the Courthouse steps is worth the trip?

Kent- Most of the auction homes are not great deals... only some of them. That's why it's a legwork and math exercise. You really need to visit the properties well in advance of the foreclosure date and know the comps. This requires quite a bit of due diligence. If one does all the homework, it can be rewarding.

FEB

How are you doing comps these days?? I'm not doing foreclosures or short sales, but like reading about them. It reminds me why I'm not doing them!

Chuck, There are some great deals everywhere on forclosures but I'd be worried about the "as in" part.....do they allow for home inspections? I know they are selling here but more, I believe, for the land then the home itself.

Susie- The comps are less reliable than they used to be. We still do the traditional things but we look mostly at the sales of the past three months in areas where there are few sales and then sales of the past month in areas where there are many sales. Also... that bank owned property in your neighborhood? That's the new retail.

Carole- The "as is" used to be considered at very large impediment. Now... people factor in the fix-up and tend to look at that as an additional cash amount that needs to be set aside for repairs. I guess you could say that the traditional rules of real estate are on hold for the time being.

Chuck the way it's going we will all have to learn these things to survive.

John- In my market, to ignore this segment would mean to compete against the majority of agents for fewer than half of the home sales. On the flip side- to concentrate on this market means competing against the minority of agents for more than half of the current transactions.

Real Estate always have many different divisions great to learn all trades as a professional service our clients. Have a great week!

FEB

This is such helpful info for consumers (and me too!) And it sounds like you have some savvy up your sleeve! I, too, get concerned about the "as is"... so heed the "Beware of Bank" signs and be prepared to get that inspection so you'll have no surprises about the $$$ you'll need to invest after your great bargain is acquired. Of course I'm certain you have everything under control there is AZ!

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