Monique covered it well. Buyers think that foreclosures are the best deals available. Although there may be the occasional steal or deal to be made out there, it takes a lot of guts, savvy and determination to successfully purchase a property on the steps of the county courthouse. It takes 100% cold hard cash in the form of a cashier's check if you are to walk away from the sale a new property owner.

With loan amounts at all time highs it makes it quite difficult to be able to pay cash at the time of sale unlike it did in the early 90's. The opening bid for a trustee's sale will typically begin at the loan amount of the trust deed plus the amount of the default, attorney's fees, trustee's fees, transfer fees, etc. If a home is worth less than the loan amount would it make sense to purchase it? No. If the home is worth more than the loan amount then the seller would have sold it themselves to retain that profit. But there are many variables that can happen to facilitate a private party purchase that finally makes sense.

Some of the best opportunities are available even before the short sale or foreclosure process begins on a property. Instead of looking at the "hot sheet" to find the new listing inventory, check the homes that have been listed for 6 months to a year or more. Now those sellers are the ones ready to negotiate and be done with the whole "listing and sale" process. You may be surprised! And you can finance those transactions with little to moderate cash involved.

Fri Mar 21 2008, 21:34

Hello Linda,

Foreclosures are available at the courthouse and require all cash. You wil also assume any encumbrances and debts on the property so when you bid on it and purchase it you could end up owing a lot more on it than what the property sells for. When you go to the auction you are bidding on the property and are paying off one of the loans but their could be 2nds and other debts. If a foreclosure does not sell you can purchase it as an REO (Real Estate Owned). This is a post foreclosure. The best bet (as where the deals are) is to purchase the property Pre-foreclosure. A homeowner may list their home when they are in default on their loan. The bank may be willing to take lower offers to prevent the cost of REOs or Foreclosure sale. You can find these properties by using a real estate agent that can pull them from the MLS (multiple listing service). Finally, to answer your question about where to find foreclosures try realtytrac.com

Best,

Monique

Thu Mar 20 2008, 20:56

Hi Linda,

It depends on how you are going about purchasing it. If you are going to the courthouse steps to buy it at the auction, then you need 100% cash (or cashiers check). If you are purchasing from a lender, they are going to want to make sure you are preapproved before hand (usually through them, although you are under no obligation to use them). And depending on your credit score etc, it's going to probably be a minimum of 5% down (FHA Loans are requiring 3%). A lender would be in a better position to answer you specifically.

Thu Mar 20 2008, 20:29