Everyone has interest of finding a bargain, and real estate foreclosures are often seen as a good buying opportunity, particularly by people looking for their first home, or investors seeking a good deal. Some of the best deals in the South Florida real estate market today can be found in distressed properties.

Foreclosure properties can be a more affordable option than traditional properties.

It is possible to save from 10 to 30% of the market value, and certain properties offer savings of 50% or even more.

Buying a foreclosure can be a smart investment, whether you plan to live there, rent it out, or do a fix and flip project. Not all foreclosures represent bargains. Finding the best deals requires research, market analysis and a great deal of time reviewing all of the properties. With my services, finding and buying a foreclosure saves you time and money!

If you are about to be in foreclosure; call me. There are options available to you! Act quickly in order to stop the foreclosure process. If you are already in foreclosure, you may still have options, but as time passes these options become more limited. 

FORECLOSURE

Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a real property due to the owner's failure to comply with a mortgage.

Typically, foreclosure is caused by owner's failure to pay the mortgage payments, but the default to perform any requirements of the mortgage may also cause foreclosure,like the failure to pay the property taxes.

MARKET VALUE

Market value is the most probable price which a property should bring in a competitive and open market under all conditions requisite a fair sale, the buyer and the seller each acting prudently and knowledgeably; and assuming the price is not affected by undue stimulus.

 SHORT SALE

Short Sale occurs when a property sells for a price that is less than the amount owed to the lender.

To qualify for a short sale, the homeowner should show a financial hardship; and owe the lender as much or more than the property is worth.

 A Short Sale not always is a Good Deal

  • There is no assurance that the seller will obtain the approval of sale from the lender.
  • Most lenders will not allow the seller to pay for repairs.
  • Most lenders will not allow closing costs and other credits to be given to a buyer.

There may be other properties available though a traditional transaction which you may find better satisfies your goals.

  BUYING FORECLOSURE   There are three different ways:

PRE-FORECLOSURE PURCHASE 

Buying a pre-foreclosure property from a private homeowner is the best option for a typical buyer.

Some of the best deals can be negotiated with sellers who typically are very motivated to get out from the mortgage without destroying their credit rating.

The buyer gets a below-market price on a home and has time to research the title and condition of the property.
    

BID AT THE AUCTION 

Foreclosure auction sales are typically the domain of the professional investor. These properties are formally in default, and sold to the highest bidder at an 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 in advance. Buyers will be competing against professional investors and sometimes even the lender.

A public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the owner.
   

BUY DIRECTLY FROM THE LENDER 

If the lender takes ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction, the lender will usually want to re-sell the property to recover the unpaid loan amount. A property owned by a lender is also know as REO (Real Estate Owned).

The lender will then typically clear the title and perform needed maintenance and repair; however, the potential bargain for these REO homes is typically less than a pre-foreclosure or auction property. The advantage of purchasing directly from the bank is the elimination of all title risk.

AVOIDING FORECLOSURE

The best way to avoid foreclosure is to take action as soon as possible. You may have several options to enable you to save both your credit rating and your home.

 TEMPORARY SOLUTIONS 

If you have suffered a temporary financial adversity, you may have these options:

Forbearance - A forbearance agreement allows for a temporary change in your mortgage contract. The changes may consist of temporarily lowering, or eliminating your payments for a pre-determined period of time.

Reinstatement - Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date.

Repayment Plan - If your account is past due, but you can now make payments, the lender might agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.

 LONG-TERM SOLUTIONS 

Mortgage Modification - Loan modifications can lower your payment by extending the term of the loan; often incorporating delinquent payments into the loan modification.

Deed in Lieu of Foreclosure - A Deed in Lieu allows you to offer your property's deed back to your lender in order to prevent foreclosure. It does have a negative impact on your credit record, but not as much as a foreclosure.

Refinancing Your Loan - If you have an exceptional credit it may be possible to refinance your mortgage for a lower interest rate and/or lower monthly payment.

Selling Your Home - If catching up is not a possibility, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home.

  

If you are interested in buying ForecIosure or if you are about to be in Foreclosure, don't hesitate to contact Raffaele Covino.