You have received sound advice so far. Here are a few other thoughts...
If you make an offer on a default property in California, do it in writing, as you may be helping the sellers by prompting them to start the short sale process with their lender or lenders. You don't even have to say that you know they are in default as this can cause the seller to become angry. By making an offer in writing (yes, a Realtor can help you make an offer on a property that is not listed), you will up your chances of hearing either a yes or a maybe fromthe sellers. They can always turn down your offer, though, often times an offer helps bring about recognition that something needs to be done.
Remember that if the property is owner occupied (1-4 units) and you will not be living in the property, then you must adhere to Calif. Civil Code 1695 (protections for sellers in default). Note exceptions and required written notices, font sizes for notices, wording and time frames etc. Realtors have access to the Notice of Default Purchase Agreement (NODPA) which should meet all state requirements.
You should also know if there is one loan or more in default, the date of default, the legal owners, sales comparables, the legal description and have all the corresponding documents (such as deeds, notices etc.) for review.
As stated below, it is legal to do what you are describing. It is very likely that someone who is in the foreclosure process owes more than the home is worth and thus, can only do a short sale. You definitely want to work with a REALTOR that is experienced in short sales and in Oceanside.
Ta-Da- My name is Sinead McAllister and I am both. Call me when you can if you are interested in buying a short sale or foreclosure in Oceanside.
The homeowner will require a Realtor if the property is facing foreclosure. The Realtor will need to negotiate with the foreclosing lender on their behalf as others have stated it is a long and detailed process. I have yet to see a homeowner do a for sale by owner when it is a short sale it does not make any sense when there is zero monetary return to them.
But is it worth it.? It will be impossible to find some one that has equity and is loosing their house. You can study N.O.D lists to find distressed properties. But there are seasoned veterans of this practice that have teams of employees doing the same thing that you will be competing with. Once you find one you are going to have to initiate a short sale. At this point you are going to have to hire a real estate professional. I would hire an attorney. This process will take about a year and will in the hunt consume most of your time. You will save maybe $10,000.00-$30,000.00 on a $300,000.00 purchase if not get burned.
Agents are just that--agents for buyers and sellers. But the transaction itself is between the buyer and the seller.
In today's market, most houses heading toward foreclosure are likely to be upside down--worth less than the mortgage on them. But that historically hasn't been true, and I'm sure there are some foreclosures today where there's equity in the property.
As others advise, you'd be much better off with an agent representing you . . . whether or not the seller is represented. You'll need that expertise. In fact, asking "What is the process?" is good evidence that you need a real estate professional representing you.
Hope that helps.
Also, many lenders have given up as they get closer to a foreclosure date and may or may not talk to anyone about it, plus they sometimes do damage inside the house as they blame the lender for their problems.
I see you have questions about home buying. I would suggest consulting a Real Estate professional, it costs you nothing as the buyer but it does provide a ton a support and experience in purchasing a home - especially in this market of foreclosures and short sales. I am born and raised in Oceanside and do almost all of my business in Oceanside. Please feel free to contact me and I am more than happy to take some time to answer your questions and get you on the right track to becoming a home owner.
Best of luck and I look forward to meeting with you,
In the vast majority of cases, people losing their home in foreclosure are severely upside down. In order to purchase at current market value the bank would have to approve a short sale and be willing to right off the losses or pursue them through other means.
Most lenders that approve short sales want them presented to the broadest possible market though listing them with an agent to ensure they obtain the closest to full fair market value.
I would suggest you find a great local agent with successful short sale experience to contact the owners on your behalf and see if they would be willing to participate with a short sale. It could benefit them through allowing a longer occupancy until the short sale is approved, 3 to 9 months commonly, and allow them to recover their credit sooner.
As a non-licensed agent, is it legal to contact any homeowner to see if they want to sell to you. If you use an agent, then that agent needs to make sure that homeowner isn't already represented by a real estate agent. As for what the process is after that, it really depends. The seller should use an agent if they are going to attempt a short sale and if you are unsure of the process, then it's best for you to use an agent, as well. The good thing, is that the commissions are paid by the seller or their lender.
As far as the process, a title search of the property would be recommended. Talking to the homeowner would be necessary. Approach them with respect and truly wanting to help.