What You Should Know About Foreclosures
Foreclosed homes are more prevalent in the real estate market these days. The most common foreclosure is happens when a bank or lender forces a sale for non-payment. The property goes to a foreclosure sale by the Trustee named in the deed of trust. The foreclosure sale happens on the court house steps. If a house isn't sold on the court house steps, the house goes to the Lender and if the lender is a mortgage company or bank, it becomes known as REO (Real Estate Owned Property).
Banks typically engage real estate agents to list and sell the property. There are some good buys in foreclosures, however, I would suggest most buyers look at REO properties instead of trying to bid and buy a property sold on the court house steps.
Purchasing a house on the court house steps is for a sophisticated investor, not the typical home buyer. There are a number of risk to buying a property at a court house auction, including liens, property damage, etc. When you buy a house at these auctions you don't have an opportunity to inspect the house for damage or other problems.
I suggest that you work with an exerienced REALTOR® who can help you find and purchase a REO property. REO property is usually sold "as is", however, your agent can help you arrange an inspection and help negotiate a good contract including necessary repairs. Additionally, when you buy a REO property, you can purchase Title Insurane which will insure clear title to the property, free from liens.
You may have heard the term Short Sale. A short sale occurs when a lender agrees to take less money than owed on a property. If a lender approves a short sale and the property sell for less than what is owed, typically a lender will forgive that indebtedness, however the lender would issue a 1099 for the forgiven debt. That amount for the forgiven debt is considered taxable income. In 2007, Congress passed a law which allows a homeowner to forego any tax liability on that income. This law has been extened until 2011.
If you or someone you know is concerned about their property being foreclosed on, please contact me about assisting in the short sale process. I have had short sale training and have worked with clients and lenders in the short sale process. It is imperative to begin the short sale process as soon as a homeowner gets a notice from their lender about the possibility of foreclosure.
Banks typically engage real estate agents to list and sell the property. There are some good buys in foreclosures, however, I would suggest most buyers look at REO properties instead of trying to bid and buy a property sold on the court house steps.
Purchasing a house on the court house steps is for a sophisticated investor, not the typical home buyer. There are a number of risk to buying a property at a court house auction, including liens, property damage, etc. When you buy a house at these auctions you don't have an opportunity to inspect the house for damage or other problems.
I suggest that you work with an exerienced REALTOR® who can help you find and purchase a REO property. REO property is usually sold "as is", however, your agent can help you arrange an inspection and help negotiate a good contract including necessary repairs. Additionally, when you buy a REO property, you can purchase Title Insurane which will insure clear title to the property, free from liens.
You may have heard the term Short Sale. A short sale occurs when a lender agrees to take less money than owed on a property. If a lender approves a short sale and the property sell for less than what is owed, typically a lender will forgive that indebtedness, however the lender would issue a 1099 for the forgiven debt. That amount for the forgiven debt is considered taxable income. In 2007, Congress passed a law which allows a homeowner to forego any tax liability on that income. This law has been extened until 2011.
If you or someone you know is concerned about their property being foreclosed on, please contact me about assisting in the short sale process. I have had short sale training and have worked with clients and lenders in the short sale process. It is imperative to begin the short sale process as soon as a homeowner gets a notice from their lender about the possibility of foreclosure.
