Foreclosure can be a mutually beneficial transaction for a willing investor and a distressed home owner. It’s a home owner’s worst nightmare, and can result in a long lasting and harmful blow to financial situation.
o Unable to continue the job due to medical conditions or ill health
o Mounting debt and excessive bills.
o Tiff with co-owner or divorce,no mutual understanding with concern
o Relocation to another state due to job transfer
Profiting from foreclosures is not an easy task because for each process the person might have undergone many risks. Every property purchase includes danger. While traders with the very best of motives can help to decrease their danger, they cannot absolutely remove it. A typical foreclosure process can extend over a few months and more. Each stage of foreclosure can offers different types of opportunities to the buyer.
There are three stages of foreclosure namely
1) Pre-foreclosure
2) Foreclosure Auction
3) REO stage or Real Estate Owned by banks
Pre-foreclosure
Once home loan repayments have not been made for at least 90 days, the lender records a public notice that the proprietor has delayed on their home loan, and then email the notice to the house proprietor. In some states this notice is referred as a Notice of Standard (NOD); in others, it is a Lis Pendens. With regards to the law in your state, the lending company might be necessary to publish the notice on your home. The best potential leads to locate a property at this stage may come from attorneys, accountants, real estate agents, or through business associates and friends. This stage is generally a grace period to the owners to sell the place or come up with the cash.
Foreclosure Auction
Foreclosure auction is the second stage in this process. When the home owner doesn’t correct the default after the Notice of Default is issued, the lender or the particular person will sets the date and the time for the house to be sold at the auction known as a Trustee Sales. The notice of Trustee Sales is documented with the Nation Recorder’s Office, sent to the house owner, released on the entrance of the property and released in a local paper — to make sure everyone knows when and where the auction will take place. As a result of the auction many lenders either simply ink an agreement with the homeowner to take the property back or buy it back themselves at the auction.
Real Estate Owned by banks
The final stage of the process is Real Estate Owned (REO) stage where the property reverts to the bank that is when the property has not purchased by the third party in the foreclosure auction then the lender takes the ownership of the property (owned by the bank) know as REO.
REO are sold in 2 ways
Generally they are listed with a local real estate agent for sale on the open market (they are usually put on the mls (MLS) so that regional purchasers’ providers can show and offer the residence to a certified customer for a commission payment)
Some loan companies want to offer their REO qualities at an REO liquidation market, often held in auction centers, at meeting facilities or at the residence.
For more information visit: http://www.propertyauctionzone.com
