Can anyone help me understand the process on buying ore foreclosures?
I understand what they are, but let’s say I talk to the seller and set up an appointment with them. We talk about the home and agree on a cash offer. What steps do I take next? Do I need to bring any specific documents?
Any info is greatly appreciated!
Foreclosures are where the borrower is behind in payments so that the lender is now executing its rights under the note and mortgage.
At a certain point in time, depending on which state you're in, the property that is being foreclosed upon will be put up for sale. At that point you can bid on the property.
Before that point, you can speak with the borrower to see what if anything can be done to bring them up to speed with the payments that are owed.
Essentially, absent a few strategies which are too complicated to get into here, you must pay off the bank. This is what is expected of the borrower by the lender.
During the pre foreclosure period, what do I do or what documents do I need to lock in the property?
You are in essence trying to buy the property from the defaulting borrower and satisfy the bank.
You must stroke a deal with the borrower, whatever thst is to get the property from them, while they still own it. Thereafter, or as a consequence thereof, the lender must also somehow be satisfied.
What ever deal you strike must be memorialized in a writing with the owner...you are buying from them.
Get a contract with the seller and get the contract to the title company or attorney that will close the transaction. Set the closing date BEFORE the foreclosure date. Put in the contract all the necessary information: price, terms, when seller is moving out, what happens if they don't(rent), date of closing, etc.
You will also have to get the seller to get information about the lender to closing people so that they can contact the lender to find out what the payoff is on the house.
Always remember, if they are not paying the mortgage, they are probably NOT doing any kind of repairs either. I always see water leaking under sinks, toilets running, roof leaks, a/c or heater not working. When you come up with a price, remember there are going to be plenty more repairs than you can see from a quick walk through.
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