As an Arizona real estate broker specializing in short sale and auction properties I get asked a lot of questions about the foreclosure process. Here are my answers to the most common:
1. How do I find out the details of the sale (date, time of sale, where it will occur)? The best way to find the most up-to-date (and up-to-minute) information regarding a Trustee Sale is by calling the Trustee directly. Your bank's Trustee information can be found on the paperwork you are receiving from the bank in the mail as well as the foreclosure papers posted on the property. This information in also public record on the County Assessor's website.
2. Will potential auction buyers harass me the day before the sale? The answer to this in many cases is yes. Auction buyers drive properties usually the day before or the day of the Trustee Sale. You may find them walking on your property, peaking over the fence, looking in your windows, snapping photos and/or knocking on your door to get a peak of the inside and determine if you are a renter (see #3). Most will not bother a home that is occupied, but their goal is to see inside the home if they can.
If the home is vacant, some may try to do a "soft break-in". (I made up this term myself to describe the ones who will jimmy a window open, crawl through a doggy door, or use locksmith tools to gain access to the home). They are not there to damage the home (though I have seen one guy break a door off the hinges), they simply want to get a look around at what they are bidding on. Auction buying is a competitive business and getting the most information about a property gives the bidder an edge.
2. Do I have to move out of my home before the sale? No. You can stay where you are and wait for the buyer (or buyer representative) to contact you following the sale. (see #4) I will often recommend the owner stay in the home until the auction takes place. Trustee Sales are regularly postponed, many times at the last minute- the morning of the scheduled sale. I have seen families move out the night before the sale only to discover it was postponed another month. It is not uncommon for the bank to postpone a sale numerous times adding additional weeks or months. Stay if you can. The bank prefers the home stay occupied to prevent vandalism and theft.
Tenants: If you are a tenant with a valid or bona fida lease that was entered into prior to the sale (and you are a non- family member paying a reasonable rental rate), the new owner must either honor your lease for 90 days (if he is planning to occupy himself) or honor your entire lease (if he is an investor or the bank , aka a non-occupying owner).
3. What happens to my belongings if I'm not complelety moved out by the Trustee Sale date? If you have moved out I recommend you get all your things out before the sale. But if you left something, the new owners must give you an opportunity to claim your belongings (for a limited time). New buyers like to change locks the same day they buy the home, so if you are not home leave a note with your contact information and/or instructions for your things.
4. I've heard of Cash for Keys? What is this and how can I get it? Your home will be sold to either a private individual or company. If no one bids on the home at auction it will revert back to the bank. The new buyer or buyer representative will contact you to discuss your plans to move. This is your opportunity to negotiate "Cash for Keys". You will sign an agreement wherein you promise to leave the home in good, clean condition (leaving fixtures, appliances, etc) and in turn the new owner or bank will offer you cash. The amount varies depending on your situation......but my experience is you can expect $1500-$3000 on average. Don't get greedy and demand $10,000 (yes I have actually had people do this). Remember, you are no longer the owner and can be easily evicted for about a $1000 cost to the new owner. Take the cash and cooperate with the new buyer. Property Managers have told me there is nothing worse than an eviction on your credit when trying to secure a new rental or apartment.
5. How long will the foreclosure stay on my record? Foreclosure is still one of the worst things to have on your credit history. It is better to try a short sale if you can. A foreclosure will remain on your credit for up to 7 years after the date of the sale. Some law firms and credit repair companies are successful at removing foreclosures, but you should be cautious and do your homework before hiring someone.
6. When can I buy again? This is the most common question I am asked. The answer is, it depends. Banks have guidelines as to when they feel you are no longer a credit risk and will lend again. Click here to see bank time-lines.
Guidelines do change and some small banks are beginning to lend to those with BK, Foreclosure or Short Sale on their records.
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