A broker or agent can provide quite a bit of assistance with buying a foreclosure. Banks are especially picky with the process and can reject offers for the most sensitive of errors. A lot of the REO and Short Sales sales move through the sales process using the Equator program which is for agents and brokers to use. Also, you want a broker or agent who has access to the lenders who hold the properties.
Attorneys will charge you for their time, and you'll have to pay this out of pocket. Agents or brokers receive commission that's paid by the seller or the bank that owns the property and this costs you nothing.
I was just on a conference call yesterday with some of the top banks in the country dealing with foreclosures. They care the most about the bottom line and want to only take a 5-10% hit off the fair market value of the property.
I'm a short sale/reo specialist and I have access to the equator process and to the lenders through a special program for elite brokers in the industry. I also provide a 50% rebate of any fees that I receive from the bank.
Let me know if you're interested in speaking. Best of luck and happy house hunting!
It is fascinating to me that the question of some secret formula to apply to get control of property comes up again and again. If there was a formula then there would be no bidding and without bidding there would be no true finding of what the market will bear for the property. If a formula worked then everyone would offer the formulaic price and so why not just ask for that formulaic price? If it were the case that everyone used the same formula, my client would have an advantage if they paid over the formula - oh no - now everyone has to think what is that other person going to do. Are they going to follow the rules of the formula or do I have to figure out what the place s worth to me?
That's the formula Volvobox, everyone has to figure out what the property is worth to them and that is one of the many things that a Realtor does, helping you decide what the property is worth to you.
As an attorney, I can safely say that things have been streamlined on the lender side. Luckily most of the legal intricacies are usually wrapped up by title companies or expediters the banks use to dispose of these assets.
In fact, I quite prefer these types of transactions because usual commission rates will apply, buyers tend not to pay commissions and deals can close within 30 or 45 days. stated differently, settled expectations are the name of the game.
I prefer these transactions over short sales â€“ which can prove to be interminable, uncertain and can fall apart without anyone knowing why or when. (That said, new rules are supposed to be coming into effect to change a situation.)
But still, to the extent that there are foreclosed homes available in San Francisco â€“ and that inventory is shrinking every dayâ€“ they do represent good opportunities, but be prepared to do a lot more work than you usually would on any other house you get.
After the NOD a Notice of Trustee's Sale (NOTS) is recorded - this is the announced sale on the court house steps. At the steps, as Oggi said, you'd probably hire an attorney or do it on your own. A Realtor could help you with some research, but is unlikely to assist on the steps with the actual purchase. If no one bids on the home (most likely because the loans are greater than the value, or high enough that there isn't any profit potential) the bank takes it back.
The final stage of a foreclosure is now that the lender owns the home, it is called an REO (Real Estate Owned by lender). Many lenders hire a Realtor and list it on the MLS. If you're somehow able to cut through the red tape and find the person in charge of REO's at the bank you might be able to buy it before they hire a Realtor, but that's no easy task.
Sooooo.... it depends which of these stages you're interested in.
As for bidding, it all depends on the type of property, location, condition and the initial price set by the bank. Sometimes foreclosures sell for less than the asking price.
Oggi Kashi - 415.690.3792 direct
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to errors and omissions, and not warranted.