Originally posted by @Isaac Josey :
How would I go about wholesaling foreclosed homes aren’t they mostly owned by banks?. I’ve read in multiple places not to buy from the bank and I’ve also read that it’s possible to sale foreclosed homes. Can somebody enlighten me on this. Apparently I have to write a college essay in order to post....I almost forgot when it comes down to closing the deal do pay the title company anything?
Also would I have to pay an attorney to look over my contracts before I start having sellers/buyers sign them.
I think what you have run into is people using the wrong terms.
1) A pre-foreclosure is a property that is still owned by the borrower but is in default on the loan but no sale date has been set.
2) A "foreclosure" is a misused term. A foreclosure means that the property is in default and has passed the "grace period" and a sale date has been set.
3) A foreclosure sale is when the borrower fails to correct the default before the sale date and the bank doesn't postpone the sale date and takes the property "to sale".
This is called the "Auction". Or as people say "buying the property at the courthouse door". In some states the sale does not need to be at the courthouse.
Sometimes banks postpone the sale date because the borrower has worked out a loan modification or filed bankruptcy which temporarily stops the sale. (the borrower can file chap7 or chapt 13 and each has a different result)
4) Once the sale occurs, if someone is the winning bidder, they own the house. If no one bids and the sale date and time pass, usually the bank is the winning bidder and the property goes into the bank's inventory. This is then called REO. (real estate owned) - I believe banks will only talk to real estate agents about REO properties. At any rate, the bank will get a BPO (broker price opinion) and eventually put the house on the MLS for sale. The bank wants all cash for REOs.
Until the property is sold, the borrower still owns the property and is the one to talk to about purchasing the property. After the sale, the borrower no longer has any say about the property unless they are in a redemption state and meet the requirements for redemption.
These are General Guidelines and by no means are applicable to all jurisdictions and every circumstance. I've tried to mention the most common things, but you have to talk to a local person with knowledge of procedures and traditons in the county you chose to "chase fireflies" in. They are bright and fun to chase but hard to make money on.
@Isaac Josey you would be miles ahead to hire Mike who posted here to teach you.. he is a pro at what you want to do.
Thanks for the information I really appreciate it