Home Buying in Canoga Park>Question Details

Chris Taylor, Home Buyer in Reseda, CA

Pre-foreclosure, foreclosure, REO, auction....which of these phases would be a good time place to jump in?

Asked by Chris Taylor, Reseda, CA Fri Dec 31, 2010

I'm not to particular for short sales as I see they can take a very long time. Preferably woild want to buy before all the above happen but just looking at options.

Help the community by answering this question:


If u have cash and u have help go trustee sales those are the best deals..real deals....if not reo or any thing priced and negotiated right....
1 vote Thank Flag Link Fri Dec 31, 2010
It can vary. Pre-foreclosure (short sale) will take a while and depends on what the mortgage lenders will accept. It would be more difficult if there are 2 lenders, however not impossible.

Foreclosure & REO are the same. The bank already foreclosed & now owns the property. Acceptance of an offer to purchase is quicker than with a short sale.

Auction= trustee sale most of the time. The property gets sold at court. This is not for the average person because you could be stuck with liens on the property which will become your responsibility.

Good luck.

Sara Mehrpouyan, CDPE
Specializing in Foreclosure & Short Sale
Rodeo Realty
0 votes Thank Flag Link Sun Jan 2, 2011
No question - foreclosure - clean title, relatively normal escrow process. If you can't find anything in foreclosure, go for a short sale, but make sure you have an agent who can manage the process well. Good luck.
0 votes Thank Flag Link Sat Jan 1, 2011
Hi Chris,
in answer to your question,....
in order,....of progression
Pre foreclosure Owner owns the house and wants to sell during short sale
Auction Owner is losing the house to the bank being sold on courthouse steps ( for cash only - cashiers check )
Foreclosure and REO is the same thing. The bank has taken back the house and is selling it as bank owned, foreclosed, or REO,
I like to use the analogy of water in a stream.
The best water is upstream.
Pre foreclosure - Short Sales - you have first shot at the house here
This is where you can buy the house with a cooperative seller using financing and get details about the house. You may also help to save a family from financial ruin and get a great deal The house is usually in better shape no holes in the walls or vandalism or retaliation against the bank by destruction of property.
Currently the wait time on short sales is an extra 30 days usually, and maybe 45 - 60 days if there is PMI or a second lender. The time frame for approval has shortened quite a bit lately.
If you have cash and want to try at a courthouse step auction you can but you have to have money in the bank ready to hand out a cashiers check by 4pm. Keep in mind many times the lender just takes the property back.
The bank took the house back. the bank owns it. The house is vacant. and the bank has no knowledge of the house. You are kind of buying blind on the banks terms. The contracts are usually one sided. If you back out you will probably lose your deposit. Some times you will be issued a warranty deed instead of a grant deed, having a weaker title. Sometimes you will have issues with squatters, vandalism by sellers or trespassers and banks prefer cash buyers here over financing.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate License # 01312992
0 votes Thank Flag Link Sat Jan 1, 2011
Most pre-foreclsoures are not on the market, the owners owe far more than they are worth and most often do not have tome for any kind of a work out or sale becuse the waited too long.

please see my blog regarding pre-foreclsoure deals.


Short sales can be great for finding deals, you however need time and patience as they can be lengthy if not negotiated properly. The key is finding the ones where the banks have already stated what they will or will not take for a pricew, perhaps one that someone else walked away form leaving the quick opportunity to buy for you.

Please see my blog regarding how to buy a short sale


Auctions are one of the toughest if you are not experienced, you will need cash to purchase and need to do your homework, you become resposnible for evicting any occupants or paying off any liens , 2nd motgages or back taxes.

The best buy is a bank owned house, the bank buys it back at foreclsoure auction, evicts the occupant and cleans the house up. They appraise it and put it on the makret below market value.

Please see my blog for tips and advice on buying bank owned house
0 votes Thank Flag Link Sat Jan 1, 2011
Hi, A short sale (pre-foreclosure) can take anywhere from 4-8 months give or take. You can go through the enitire process and then find out that the bank is denying the sale, this can be very frustrating for most. you might actually get the best deal with a short sale so if you can weather the storm go for it. A foreclosure typically is a good place as is an REO. The way a property becomes an REO is the home goes to auction, with the bank being the highest bidder. They wil do this if they feel they can get some sort of decent market value for the home. So basically an REO is a good bet because it usually comes on the market through a broker and is ready to go. The banks don't want to be in the real estate business.


Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
0 votes Thank Flag Link Sat Jan 1, 2011
Start with a foreclosure. Since you are "jumping in" you can get assistance and representation from a professional Real Estate Agent. You can then jump into other vehicles of purchase in time.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sat Jan 1, 2011
I read another agent answer to you suggesting Short Sale is the way to go for a VA buyer, I would agree. VA has tough guidelines and requirement and time consuming. Some short sale can take 30 to 60 days or more to close. You stand a great chance of getting the property. Only one offer is submitted to bank for approval so if an agent gets a good offer most likely they will submit that one. Know and respecting that time is of the essence for the current seller to sale in a timely manner to avoid foreclosure.
Good luck. I am an experienced Short Sale Listing and Buyer's Agent rendering service throughout southern Cal. Happy New Year! Shirley Bell 323 309 5230 Keller Williams Realty
0 votes Thank Flag Link Sat Jan 1, 2011
Pre-foreclosure is a short sale, Foreclosure is the same as REO if on the market tor sale, Auction is a bidding setting with many buyers bidding. I would say REO it is a short time to close escrow or can be. Pre-foreclosure if listed as a short sale some can be lengthy but you most likely will have a greater chance of getting the property in good condition. All Short Sales are not bad.
0 votes Thank Flag Link Sat Jan 1, 2011

I know I answered this question for you before. As a VA buyer, you probably won't buy AT the auctions, because you would need a Cashier check to pay for a property in full.

If you would let me refer you to an experienced short sale agent & you have some patience to, the short sale is your next best option. REO properties get a lot of bids & being a VA buyer doesn't put you in a good position as the bank will likely take an all cash offer or a conventional loan offer w/ 10-20% down before yours.

For agents out there that want to disagree with me, I have analyzed a 150 sales in one large city to see how many sales were accepted & closed to an FHA buyer & the result was about 3-5%. meaning 90-95% were sold to Cash or Conventional loan buyers.

I have a good plan for you to land a property, please email me directly & I can give you more details.

562-430-3053 cell
0 votes Thank Flag Link Fri Dec 31, 2010
Depends on what your strategy and patiences level are.

Pre-foreclosure: Lots of opportunities. Short sales are just one possibility. Advantages: Possibly purchasing at a substantial discount. Other potential buyers may not be interested (because of the long time short sales can take) or may drop out along the way. Disadvantages: Uncertainty of short-sale process and possible extended time for lender approval. However, there are plenty of pre-foreclosures that aren't (yet) short sales, and might never be. It's entirely possible for someone with equity in their property to fall behind on payments. In fact, it happens a lot. In that case, a bank's approval isn't required. You must move in, buy the house (making up arrearages), and the house is yours. Example: House is worth $300,000. It was Bought 15 years ago for $200,000, and mortgage is paid down to $150,000. Owner loses his job and falls behind on the mortgage. Let's say he's $8,000 behind, and it'll take another $5,000 for penalties and interest. That means it'd cost you $163,000 to buy the house, plus any extra for the owner. So you offer the owner $180,000. The owner gets $17,000 in cash and stops the damage to his credit. You get a house worth $300,000 for $180,000. Dan--the first answer--is correct that, logically, it'd make more sense for the homeowner to sell conventionally if there's equity in the property. But sometimes the owner just wants a quick resolution. Or sometimes, with the foreclosure just weeks away before the homeowner decides to act, there isn't time for a conventional sale.

Foreclosure/REO: They're the same. Typically, the process is a lot cleaner than a short sale. And there are some good deals with foreclosures, too. However, many foreclosures aren't in the greatest condition. The previous owners have had plenty of time to trash the house before being kicked out, and many of them have done just that. You're buying the house in as-is condition.

Auction: Only for professionals.

Based on your question'--"Preferably would want to buy before all the above happens"--look for pre-foreclosures that aren't short sales.

Hope that helps.
0 votes Thank Flag Link Fri Dec 31, 2010
Don Tepper, Real Estate Pro in Burke, VA
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer