Many customers are unaware of the different stages of foreclosure and what is involved in purchasing one of these properties.
Bank Owned (REO) Properties & More
Ann: Is it easy to buy a bank owned property?
Larry: Bank Owned (REO) are properties that the Bank has acquired through a foreclosure. This action should have cleared all liens that were junior to the first mortgage, (second mortgages, equity lines, judgements, etc). That should make it easier to purchase; the bank is looking to move it out of its inventory and take whatever loss exists for the property.
These are properties that the bank is the Seller and Decision Maker are usually easier to purchase.
In-Foreclosure & Pre-Foreclosure Sales
Ann: In-Foreclosure? Pre-Foreclosure? What is the difference?
Larry: In-Foreclosure Sales: The bank has filed a lis pendens and begun the legal process. However, the bank does NOT have ownership of these properties; the owner, although delinquent in payments, is still in title. Offering on them requires the owner to sign the contract but needs to have the bank ready to release the property if a sale is to be consummated. This is what is meant by " 3rd Party Approval".
Pre-Foreclosure Sales: These properties are in the beginning stages of foreclosure and would also require BOTH Owner Approval & Bank Approval of Selling Price. This may be a case where the property owner is delinquent but the bank has not yet filed the necessary legal paperwork. This is not unusual because of the work load of the lenders and their attorneys.
Short Sales REQUIRES 3rd PARTY APPROVAL!!!
Ann: I here so much about Short Sales. What are they and how easy is it to acquire these properties?
Larry:These properties can be anywhere in the process of foreclosure. The Bank may or may not have already started foreclosure procedures but the properties will require BOTH Owner Approval & Bank Approval of Selling Price. The best definition is that the listing price is LESS than the amount owed on it. This can be a property that sold at the height of the market and is now worth less. It can be a property that an individual owned for a long time but refinanced when the property value was higher than it is now. (These properties will require the most negotiation and patience). Requires 3rd Party Approval!
As-Is (No warranties except a marketable title)
Ann: When I see that a property is being sold 'as-is' what does that really mean?
Larry: Properties, especially in any of the above ownership stages, that are being sold 'as-is' could be in any condition ranging from Excellent to Tear Down. The property owner (whoever it is) is selling that particular property without doing any repairs including those that would other wise be warrantied items.
In other words, the property owner saying that what you see is what you get and is not fixing anything (if it needs to be fixed) that is why a home inspection is very important, so that you have a good idea of what the property condition is and what improvements (if any) will be needed.
I try to make it as easy as possible at www.LarryandAnn.com
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