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Identifying The Right Time To Buy Foreclosures For Sale

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By : John Cutts    99 or more times read
The best way to when to buy foreclosures for sale is to understand how the foreclosure process works. This includes understanding how the three stages of the foreclosure process work to a buyer’s advantage or disadvantage.

Buying At Pre-Foreclosures

Pre-foreclosures refer to that stage when a homeowner who has been in default of his mortgage payments is notified by his bank to update and make current his account. Normally, the bank sends a notice of default to the borrower only after he has failed to pay for at least 90 days. This notice, also known as a lis pendens or notice of default, can be deemed as the start of the foreclosure process, if the buyer fails to make good his account.

Purchasing a property in a pre-foreclosure stage carries a lot of benefits since as a buyer, you would have longer time to visit and inspect the property, investigate its title and of course, negotiate with the property owner himself. This is because banks are required to give defaulting homeowners sufficient time to pay for his outstanding obligation. This stage is said to be favorable to the buyer since it is easier to negotiate with the owner whose main goal is to avoid a foreclosure that will taint his credit rating.

Foreclosure Auctions

Once the borrower is unable to settle his obligation within the time given to him by the bank to satisfy his outstanding mortgage debt, then the bank will try to sell the property at an auction in order to recoup its losses. An auction is one good way to buy foreclosures for sale since interested bidders are sufficiently notified of the details of the properties being auctioned off. Plus, you can also have adequate time to research the property, removing a large of guesswork in your foreclosure investing. You will also notice that properties being sold in foreclosure auctions are reasonably priced that it is not difficult to get a god deal out of them.

REO Sale

REO sale is refers to that stage when a property, after failing to be sold at an auction, reverts to the ownership of the banks. Buying REOs is said to be the safest way to buy foreclosures for sale since banks practically erase all outstanding obligations, judgments, tax debts and other liens on the property before they turn it over to you. Thus, REO properties are known for their clean and good titles. In addition, you can also negotiate with the bank since they are highly concerned about maintaining a lesser volume of foreclosed properties in their inventory.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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