Buying a Foreclosure or Short Sale

Nurses and many healthcare professionals, like other homebuyers or would-be property investors often ask if foreclosures are really good deals and the answer is inevitably “YES”, but you need to know how and where to find them. Financing the purchase and renovating doesn’t have to be complicated either, but that takes a knowledgeable mortgage lender and more often than not, some experienced home improvement professionals to get the job done. 

There’s a couple major websites we’ve included that list foreclosure properties in your area. Be warned, however, although they're great websites to get started checking out this market information it comes from public records and everyone else is looking at them too! Records aren’t always updated and you might inquire on about a dozen foreclosures before you find one that’s actually for sale. Unless a listing is clearly marked, “For Sale” and it includes an MLS (Multiple Listing Service) number, it is probably not available.

FNMA FORECLOSED HOMES

HUD FORECLOSED HOMES

I recommend you study up a little on just how foreclosures work here in Louisiana or in your state. To do that you need to set an appointment with me or an experienced real estate agent in your area, but I can help you here in getting started with some of the basics.

1. There are two types of foreclosures — judicial and non-judicial. A judicial foreclosure goes through the court. A non-judicial foreclosure doesn’t. Some states require that all foreclosures are judicial; others set forth procedures for non-judicial foreclosures. Whether a foreclosure is judicial or non-judicial is significant, it affects the foreclosure process and procedures, how the previous homeowner can raise defenses, and often whether they’ll be liable for a deficiency after the foreclosure sale. 
2. When a homeowner falls behind in payments (usually two or three months), a lender will file what is known as a ‘Notice of Default.’ This is a warning, and it is a public document. Because it is a public document many websites like Zillow picks up those notices and publish them to give people an advanced look at what might be coming onto the market.
3. The homeowner normally has three months from the time the Notice of Default is served to make satisfactory payment arrangements or sell the home.
4. After three months, the foreclosure trustee/attorney can sell that property at a public auction, usually held at the county courthouse in which the home is located. A ‘Notice of Sale’ must be published no less than 10 days before the sale is scheduled. You might see foreclosure auctions listed on Zillow, but these dates change often as lenders work with the current homeowner cure their default.
5. If the homeowner can't satisfy the lender the home is sold at auction. Most often the lender will purchases the property and does one of five things:

• List it on the MLS for sale
• Sell it to another bank
• Sell it in a private transaction to a private buyer
• List it on a specialty website
• Holds it in inventory when the market is overstocked with properties and list it at a later date

There are several ways to buy a foreclosure home and I can certainly assist you!

When an individual decides to sell through a short sale, an experienced short sale real estate agent can facilitate that sale. A short sale means the lender is willing to take less than is actually owed, so the home can be sold to a new buyer before it is foreclosed.

This usually happens after a Notice of Default is filed and saves the bank thousands in legal expenses and third party fees, as well as saving the homeowner from foreclosure; while the homebuyer gets a great deal on the home.

1. When a lender purchases a home, decided to put it up at auction or lists it I'll know about it first and assist you with offering the right price.
2. When a home foreclosure is handled through the Federal National Mortgage Association (FNMA), or the United States Department of Housing and Urban Development (HUD) the home is listed on their website and we’ve included them both just below. All homes on these websites are for sale. HUD take the highest net bid, end of subject! But, it’s a great way to buy a home because they can be bought with very little or nothing down; with terms that aren’t complicated.

You can also purchase a foreclosed home by:

1. Attending a public foreclosure auction. However, many of these auctions require significant down payments with the remaining balance owed within a day or two after a home is sold. And, more often than not you’re bidding against a number of highly skilled property investors. Personally, I wouldn’t be inclined to take this option.
2. You can approach a bank directly about bank-owned foreclosed homes, but again it’s going to take a lot of work finding who to call and some banks won’t work with you directly.