5 Steps to Buying a Foreclosure
Buying a home in foreclosure can begin with you logging into www.PossessTheLands.com and decide where you want to search for property. www.PossessTheLands.com allows you to search by county, city or zip code. We recommend starting with a broader search (like county or city) and narrowing the search later if necessary.
Decide the status of foreclosure for which you want to search. You choose the status under Property Status on the Property Search page.
- Select Foreclosure for Default Notices or Lis Pendens.
- Select Shortsales For Pre-Foreclosure Status.
- Select Bank Owned or Government Owned for REOs (repossessions).
See Step 4 in this guide for more about the different property statuses.
The Advanced Property Search allows you to enter other search criteria, such as price range and number of bedrooms and bathrooms. We recommend that you leave all those other criteria at “no minimum” to “no maximum” when you first search to get the best results. We also recommend you don’t change the Recording Date Range when you first search.
If you want to receive daily e-mail alerts of new properties posted on www.PossessTheLands.com that match your search criteria, follow these instructions.
- After you select your search criteria, type a name for the search in the Name This Search box.
- Check the "Receive daily e-mail notifications of new listings that match this search" box.
- Click the "Save My Search" link.
- View and edit your daily alerts on your www.PossessTheLands.com saved searches.
On the Search Results page, you can sort your results by date, address, price or number of bedrooms or bathrooms. You can also view the results on a map by clicking the "View Map" button at the top of the search results. Click “Get Details” on any property to see the detailed information for that property. On the property details page, you can click the “Save Search"
The Property Details page should always include the address,price of the property and the property status etc.
You can request Comparable Sales(CMA) to view a report that includes recently sold neighborhood properties and an analysis of property values in that neighborhood..
Obtaining financing not only gives you an estimate of what you can afford, it also enables you to move quickly once you locate a property that interests you. When you approach a borrower/owner or a foreclosing lender about a property, secured financing will demonstrate that you are a serious buyer and are ready to buy quickly.
You can apply for financing with www.PossessTheLands.com financing partner. The application is free. Subscribers can click on the Get Pre-Approved tab on any listings page after you log in or click on financing links on the Search Results or Property Details pages. You will be able to apply online or by phone.
If you're a first-time homebuyer and you've never purchased a home, let alone a foreclosure property, it is beneficial to contact Joseph Goodman with Century 21 Jones Realty at 615-476-2953 who can guide you through the process of buying a foreclosure. He has lots of experience with foreclosures. Especially for first-time buyers, he and his team can be a comforting and helpful resource.
Depending on the property status, the seller will be the owner in default, the trustee or the foreclosing lender. To determine the property status on www.PossessTheLands.com, look at the Foreclosure Listings,HUD Homes List or REO List to gauge on the Property Details page.
Buying a property in pre-foreclosure(SHORTSALE) involves approaching the borrower/owner and offering to buy the property. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20 percent to 40 percent below market value.
If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.
If the lender or government agency takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender usually sells the property to recover the unpaid loan amount. The lender typically clears the title for any buyer, but the potential bargain is often less than a pre-foreclosure or auction property.
When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, so you may need to be patient when trying to contact the owner in default.
If the owner does not respond to a postcard you can try to send another postcard (the owner may have a change of heart as the end of the pre-foreclosure period approaches) or you can wait to see if the property is scheduled for auction and attend the auction.
One option is to call the owner if you can track down the phone number. Another option is to go to the property and try to contact the owner in person, as long as you recognize the ownership rights of the owner. We don’t recommend either of these options if you don’t have previous experience.
If the property is Bank Owned (REO), your first step is to contact Joseph, whose information is usually on www.PossessTheLands.com Property Details page. You should contact Joseph directly and see how you can view and possibly make an offer on the property. REO means "Real Estate Owned" by the lender.
Bank-owned properties on www.PossessTheLands.com will give you the option to contact Joseph about the property's listing info. You'll see a link to do this either at the top of the property details page or in the Contact section of the property details page.
Many government-owned properties are already listed on www.PossessTheLands.com such as HUD Homes,Foreclosed Homes,REOS.You should see a link to contact Joseph or schedule showing in the Contact section of the property details page.
STEP 5. Make an Offer
If you have never purchased a foreclosure property before, we recommend that you use Joseph Goodman to help you prepare and make an offer.
To get an estimate of the potential bargain for any property, you need to find out the estimated market value of the property, how much is owed on the property and if the owner has any other loans or liens encumbering the property.
Based on your research of the potential bargain, you can make an offer. Usually the offer amount is somewhere below the market value but above the total outstanding liens and estimated repair costs. If the property is a pre-foreclosure or bank owned, you could prepare an offer similar to a typical purchase offer, contingent on a full inspection and title search.
If the property is selling at auction, you will need to make your offer, or bid, at the auction. In many states, bidders are required to pay in cash in the form of a cashier’s check at the auction. You probably won’t be able to conduct a full inspection and title search when you buy at an auction, so it’s important to do careful research before attending an auction.