Qt1shannon, Home Buyer in San Marcos, CA

How does a pre-foreclosure auction work exactly?

Asked by Qt1shannon, San Marcos, CA Wed Sep 7, 2011

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San Marcos... you are in my area, so I can tell you exactly how it works in California. An auction only occurs when the house is being foreclosed on by the mortgage lender. So, basically, after the homeowner has defaulted on the note (usually 6-8 months), the bank will sell the home at auction. If nobody buyers the home at auction, the home will return to the bank (the new owner) and the bank will sell the home (usually through a local real estate agent).

If someone is in pre-foreclosure, this means that they have missed some payments and need to make a plan (possibly a short sale) or risk losing their home in a foreclosure auction. Anything that says 'pre-foreclosure' on the MLS generally refers to short sales--homes where the seller owes more to the bank than the home is worth and where the agents need to negotiate with the bank in order to seal the deal before the foreclosure auction. Hope that helps!
0 votes Thank Flag Link Wed Sep 7, 2011
I haven't heard of a pre-foreclosure auction. Any sale prior to the foreclosure we be through the homeowner not the bank

In Florida this is typically how things work: A short sale is when a lender and/or servicer accepts less than a full payoff of the mortgage balance. They sometimes do this instead of foreclosing on a home. If they foreclose on the home buyers can bid at the foreclosure auction (After the bank forecloses) If no one buys the property at the foreclosure auction the lender/servicer will often list the home with one of their preferred real estate brokers. If the broker doesn't sell the home within a certain time frame they will often either sell the property to a hedge fund or private investment group or they will put it in an upcoming auction. I hope this helps some

Joe Sauter,
Florida Licensed Real Estate Agent
Prudential Florida Realty
Web Reference: http://www.JoeSauter.com
0 votes Thank Flag Link Wed Sep 7, 2011
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