If the property is in pre-foreclosure (NOD, LIS), how do I buy before foreclosure?

Overview

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.

Contact Owner

After first calling the Trustee listed on RealtyTrac and confirming the property is still in default, you should contact the owner and let them know of your interest in the property and try to arrange a meeting with the owner to discuss a possible sale and to get a better look at the property.

Click the Contact Owner link on any Pre-Foreclosure or Auction Property Details page and send postcards directly to owners in default with an offer to buy before the property is sold at public auction. Subscribers can print and mail the postcards or have RealtyTrac mail the postcards for a nominal fee. You could also search information to try to find the owner's phone number. Some people also approach the owner in person, which we do not recommend unless you are experienced doing that.

Calculate Offer

To determine how much you will pay the seller for the home, you should subtract all your costs as a buyer (loan balance, additional liens, repair costs) from the estimated market value of the property and use that number as a basis for your negotiations with the owner. If you reach an agreement with the owner, you will need to make sure you cure the loan that is in default and satisfy any other liens.

You can use RealtyTrac's Xamine Worksheet to calculate the market value, outstanding liens and repair costs for a property. You can also use Xamine to check if a property is listed with a real estate agent. On any Property Details screen, in the upper right corner click What's Next>Evaluate Property.

Keep in mind that a property in a pre-foreclosure status (NOD, LIS) is not necessarily for sale. The owner may be pursuing other options to cure the default; however, an offer from a pre-qualified cash buyer may be the best solution to get the owner out from under the impending foreclosure. You can also make an offer to the owner prior to the scheduled auction date even if the Notice of Trustee Sale (NTS, NFS) has already been filed.

Foreclosure is a legal process that allows a lender/bank to take possession of a property due to non-payment of a loan that is secured by that property. RealtyTrac posts properties that have already been foreclosed (Bank Owned) and properties that are in the foreclosure process (Pre-Foreclosure, Auction). Buyers have three opportunities to purchase property during foreclosure.

Buying Pre-foreclosure (NOD, LIS)
Buying at Auction (NTS, NFS)
Buying Bank-owned (REO)

How can I buy an auction property (NTS, NFS)?

After a property owner misses several mortgage payments, the owner has a pre-foreclosure grace period of a few weeks to a few months -- depending on the state -- to bring the payments up to date and stop any foreclosure proceedings. If the owner does not bring the delinquent payments up to date during the pre-foreclosure period, the property will be sold at a public auction.

Overview

If the property has been scheduled for public auction, you could still contact the owner for a possible last-minute sale at this point, but if the owner isn't willing to sell, the property will be sold at the auction. Click the Contact Owner link on any Pre-Foreclosure or Auction Property Details page, and send postcards directly to owners in default with an offer to buy before the property is sold at public auction. Subscribers can print and mail the postcards or have RealtyTrac mail the postcards for a nominal fee.

Contact Trustee

We recommend you always call the trustee listed on the property or the county clerk to confirm the auction date, because it can be postponed or canceled. If the trustee sale has been scheduled when we list the property, RealtyTrac will post the date, time and location of the trustee sale.

Research Title

If the property is still scheduled for auction, you should check the title of the property either by using RealtyTrac's Legal and Vesting with Transaction History report or through a local real estate agent or title company. This is recommended because the winning bid may be subject to other liens in some cases. A lien is a legal filing by someone owed money by the owner of the property. Usually the debt has to be paid off before the owner can sell the property.

If the loan in default is the senior lien, then any other liens will typically be cleared out for the highest bidder at the auction (confirm this with a local real estate attorney or the trustee). If the loan in default is a junior lien, then the highest bidder will hold the note to that lien, subject to any senior liens against the property. Determine if it's the senior lien and also factor in estimated repair cost and the estimated market value to determine your maximum bid for the auction.

Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

Bid at Auction

In many states, bidders are required to pay in cash -- usually in the form of a cashier's check -- at the auction. If you're not experienced buying at auction, we recommend that you first attend an auction just to observe or consult a local real estate agent or attorney.

How do I buy bank-owned REO properties?

Overview

The lender/bank has taken 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.

Contact Lender

You should contact the lender directly and ask for the REO or asset management department to find out how you can view and make an offer on the property. REO means "Real Estate Owned" by the lender. It's another way to say the property has already gone through the foreclosure process and has now been repossessed by the foreclosing lender.

Make Offer

Although the lender usually clears out any liens on the title, you should still make any purchase offer contingent on a title search. Also, find out if the lender has made any repairs to the property or if it is being sold "as is." The lender wants to recover any money they've put into the property, but you can often make a successful offer that's still substantially under the market value.

There is no set timeframe within which the banks must sell their REOs; however, banks often want to get REOs off their books rapidly. As a result, many REOs sell quickly. The only exception is if there is a "redemption period" for the owner to buy back the property after it is repossessed by the bank. State law dictates if there is any redemption period. The bank will typically wait until the end of any redemption period to sell the property.

Keep in mind that sometimes contacting the lender can be frustrating, as the main purpose of a lender is to loan money, not to sell property. So even though the bank may have a department that handles bank-owned property for sale, that department may be hard to track down.

How do I buy property I see posted on RealtyTrac?

How you go about buying a property posted on RealtyTrac depends on the property status. If the property is For Sale By Owner or a Resale Home, you would approach the owner or the listing agent to make an offer. If the property is in foreclosure, the process of buying will differ from the typical real estate purchase.

How do I contact the lender to buy a bank-owned property (REO)?

If the property is Bank Owned (REO), your first step is to contact the bank, called the lender on RealtyTrac's Property Details page. The lender now owns the property. You should ask for the lender's REO department or bank-owned property department to proceed with possibly buying the property.

REO means "Real Estate Owned" by the lender. It's another way to say the property has already gone through the foreclosure process and has now been repossessed by the foreclosing lender.

RealtyTrac usually has the name of the lender listed on the property, but if you have trouble finding a phone number or address for them through the Internet or other means, below are some suggestions for tracking down the lender.

1. First, if the lender has listed the property with a real estate agent, you can simply contact the listing agent. If you don't have a real estate agent who can check if the property is listed, you can check using RealtyTrac's Xamine tool.

Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

2. Subscribers can click the History of Notices link on any Property Details page to view a list of data records RealtyTrac has for that property. Other data records may have more details about the property that were not on the original Property Details page. Subscribers can use this tool to check if previous foreclosure notices have been filed and if more than one lender is foreclosing.

3. Contact the local property assessor (either through county or city government) and ask who is listed as the owner of the property. The assessor should also have the owner's mailing address. Go to statelocalgov.net to find the local property assessor in your area.

4.Purchase the Detailed Subject Property Report available on many properties for an extra $2.50. This report contains the name, mailing address and sometimes the phone number of the property owner.

5.Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property.

Tracking down and finally contacting a lender can feel frustrating and take time. The main purpose of a lender is to lend money, not to sell property. Even though lenders may have an REO officer, or even an REO department that handles bank-owned property for sale, that department may still be hard to track down.

How do I check property liens, value and equity?

Additional liens against a property (these can include delinquent taxes) can be researched several ways.

1. Subscribers get free access to tax lien and bankruptcy information for properties listed on RealtyTrac. If there are any tax liens or bankruptcies, a flag will appear on the Property Details page with a link to the full information.

2. Subscribers can click the History of Notices link on any Property Details page to view a list of data records RealtyTrac has for that property. Other data records may have more details about the property that were not on the original Property Details page. Subscribers can use this tool to check if previous foreclosure notices have been filed and if more than one lender is foreclosing.

3. Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

4.Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property. If you give them the address or parcel number of the property on RealtyTrac, many real estate agents have access to title information that allows them to research a property and find the liens against the property.

5. Contact the local property assessor (either through county or city government) and ask who is listed as the owner of the property. The assessor should also have the owner's mailing address. Go to statelocalgov.net to find the local property assessor in your area.

It's important to research liens before you buy a property, whether the property is a foreclosure or not, because you as the buyer may be responsible for paying off those liens.

What are foreclosures and how do I learn more about buying foreclosures?

Foreclosure is a legal process that allows a lender/bank to sell or take possession of a property due to non-payment of a loan that is secured by that property. RealtyTrac posts properties that have already been foreclosed (Bank Owned) and properties that are in the foreclosure process (Pre-Foreclosure, Auction). Buyers have three opportunities to purchase property during foreclosure.

How does RealtyTrac help me pursue and buy properties once I subscribe?

Although RealtyTrac is not an agent or broker directly selling properties, RealtyTrac has several tools and resources available to subscribers to assist in pursuing any property listed in the RealtyTrac database. We are continuing to add features to make the site more useful to buyers.

Read an Overview of the foreclosure process, which includes links to state laws and other resources.

Get Financing Options using RealtyTrac's financing partner.

Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property.

Click the Contact Owner link on any Pre-Foreclosure or Auction Property Details page, and send postcards directly to owners in default with an offer to buy before the property is sold at public auction. Subscribers can print and mail the postcards or have RealtyTrac mail the postcards for a nominal fee.

Subscribers can click the History of Notices link on any Property Details page to view a list of data records RealtyTrac has for that property. Other data records may have more details about the property that were not on the original Property Details page. Subscribers can use this tool to check if previous foreclosure notices have been filed and if more than one lender is foreclosing.

Schedule Daily E-mail Alerts on RealtyTrac's Property Search page to receive daily e-mail alerts of new property posted that matches your search criteria. After you enter your search criteria on the Property Search page, type in a name under Search Name, check the "Receive daily notifications of new listings that match this search" box and click "Save My Search."

Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

Click the Save to My RealtyTrac link on any Property Details page to save properties of interest for quick reference. Subscribers can view these preferred listings anytime by clicking on the My RealtyTrac tab after logging in to the site.

RealtyTrac is the largest online marketplace for foreclosure and pre-foreclosure properties and is one of the top five most-visited real estate portals on the Internet. Subscribers have access to more than 500,000 pre-foreclosure, auction and bank-owned properties nationwide. RealtyTrac also provides tools and resources to help in the process of buying a property. Subscribers can get pre-qualified for a loan, contact a local real estate agent, send postcards to owners in default and order reports to research and analyze properties.

What does the dollar amount listed on RealtyTrac mean?

The amount listed on RealtyTrac is usually based on the defaulted lien amount or the transfer value. Called the Balance or Opening Bid on RealtyTrac, the defaulted lien amount is what the foreclosing lender needs to break even. If our data sources don't provide that amount, then we use the Trans Value, which is the amount paid for the property when it was purchased by the owner in default.

This is not the asking price for the property; it's a starting place for you to begin your negotiations with the seller. The goal is to get a good bargain, but you shouldn't necessarily expect to buy the property for just the defaulted lien amount.

Either the defaulted lien amount or the transfer value gives a good estimate of what is needed to satisfy the lender. If you subtract this amount -- and any other liens against the property -- from the estimated market value of the property, you will have a good idea of the potential bargain that could be realized with the property. This will also give you a solid foundation for making an offer to the seller.

Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

If you work with a real estate agent -- recommended for first-time foreclosure buyers -- the agent can provide professional advice on the value of the property and how much you should offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property.

If you don't see the Balance, Opening Bid or Trans Value on a property, you should check if RealtyTrac has other records for that property. Subscribers can click the History of Notices link on any Property Details page to view a list of data records RealtyTrac has for that property. Other data records may have more details about the property that were not on the original Property Details page. Subscribers can use this tool to check if previous foreclosure notices have been filed and if more than one lender is foreclosing.

If RealtyTrac is not able to get the Balance, Opening Bid or Trans Value, then we may base the Amount on the Default Amount or the Assessed Value.

The Default Amount is the amount the owner in default is behind on mortgage payments and will only display for pre-foreclosures. This is typically 3-4 months worth of back-owed payments to the lender/bank.

The Assessed Value is the amount the county property assessor has valued the property for the purpose of levying property taxes. This is a good number to look at, as long as you understand that the assessed value may not actually equal the market value for the property. You can contact your county assessor to find out how to put the assessed value in context.

If the amount in any of the fields is N/A or TBD, it means RealtyTrac was unable to find enough information on that property to come up with an estimate of the amount.

How do I find the market value for a home?

For subscribers, RealtyTrac provides Estimated Property Market Values on the Property Details page of property posted on RealtyTrac. The Property Details page also includes tax lien and bankruptcy information.

If you're not a subscriber, you can order an automated valuation report from RealtyTrac to find the market value of a property. Go to our Property Reports Matrix to view samples and order reports that will help you research market value and transaction history.

Market value is an estimate of what the property will sell for on the current real estate market. Keep in mind, when determining the final offer you want to make on the property, you will need to balance the market value with any liens against the property and estimated repairs.

Subscribers can use RealtyTrac's Xamine Worksheet to calculate a property's potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What's Next>Evaluate The Property, which is located in the upper right corner.

If you work with a real estate agent (which is recommended for first-time foreclosure buyers), the agent can provide professional advice on the value of the property and how much you should offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property.

1. Buying Pre-Foreclosure (NOD, LIS)

2. Buying at Auction (NTS, NFS)

3. Buying Bank Owned (REO)

courtesy Realty Trac


	Rama Mehra - Windemere Select Properties Ph: 1-888-703-7262 - Fax: 925-891-9180 5601 Arnold Way Ste 104 Dublin, CA 94568 www.ramamehra.com