Buying a home that is in foreclosure is much different than buying one that is for sale by an individual or a property owned by bank.
A foreclosure is a process that allows the lender to repossess the home and later sale it to resolve a default on a property.
Why is Georgia Allowed to do a foreclose? The lender may take it back in form of Foreclosure, because the bank actually owns the property until the debt is paid in full and allows the Buyer to stay in the, use the, and occupy the home.
How is the title held? Title is held in Georgia as Title in Theory. This allows the Buyer to give legal title to the lender as “Deed To Secure Debt” or “Security Deed”. By doing this the lender actually owns the property until it is paid in full.
How does the Bank actually take the property? The bank takes the property back by exercising the power of sale in the instrument used to secure the Debt or Non-Judicial Sale. The Bank must follows specific guidelines; First, declaring the buyer is in default, Second, The Lender must give Statutory Notice and third, the lender will attempt to sale the home on the court yard step on the first Tuesday of the month.
What are the Specifics of a Non-Judicial Sale? A Non-Judicial Sale works like this,The Buyer must be given written Notice fifteen days prior to the sale, Notice of Default and pending foreclosure must be run in the local paper for 4 consecutive weeks, The sale must take place The first Tuesday of the month between the hours of 10:00AM and :00 PM
How does the sale at the Courthouse actually work? The way the sale at the courthouse steps works is the sale is know as an Non-Judicial Sale meaning no hearing is required. After notification is given as stated above it is sold.
Who are the people that buy homes at the Courthouse? Buyers at the courthouse are people looking for a deal. People the understand the risk, and that have researched the homes first, ie. had the attorney do title searches, Lien searches, and if there are any second and third loans on the home.
How are the homes paid for? The home is paid for in full by winner (The one having the highest) in full immediately. The only one that is not required to pay in full is the lender.
Can a foreclosure be cancelled? A foreclosure may be cancelled.
Why would the bank cancel a foreclosure? The Buyer worked out a plan to repay and the back accepted, The Buyer came up with the funds needed to stay in the home.
What happens if a foreclosure is cancelled? If a Foreclosure is cancelled it starts all over again. The Buyer must be given written Notice fifteen days prior to the sale, Notice of Default and pending foreclosure must be run in the local paper for 4 consecutive weeks, The sale must take place The first Tuesday of the month between the hours of 10:00AM and :00 PM.
What happens after the home is sold to the highest bidder? Once the home is sold to the highest bidder they may do what the wish with home. The highest bidder does not have to worry about previous home owner coming up with the money and wanting the house back.
Why does the highest bidder not have to worry about the previous owner wanting or getting the home back? The highest bidder does not have to worry because Georgia does not have “Right of Redemption” for a buyer once a home owner has been foreclosed.
What happens is the property does not sale on the court yard steps? If the property does not sale on the court yard steps? The properties go back to the lender holding the “Deed to Secure Debt”. Once the property goes back it is then call an “REO” or Real Estate Owned.
Are “REO” properties better than foreclosures? Yes and No. It depends on skill level. “REO” properties by contrast are less risky. Once the Lender gets the home back they will search the title for any liens on the property and negotiate to remove liens, write off Junior Mortgages, evict tenants (If required), pay Home Owner Association Fees not paid, clean and haul off debris left by the prior buyer. Ideally the Lender will get the home ready to be marketed by a Realtor.
In conclusion: Buying a Foreclosure on the courthouse steps should be left up the pros. When looking for a deal contact a Realtor and look for “REO” properties. It will be a much cleaner deal. Homes that are “REO” are ofter reffered to foreclosures. Please do not be confused. The term is a generic term also. If the property is listed with a realty company it should be okay.
Times have changed, ask any Mortgage Lender, Realtor, or anyone looking to buy a home.
When buying a home the buyer must be pre-approved unconditionally. Why is this so important to be approved unconditionally? The bottom line is, I would hate just as any other Realtor for the buyer to find a home they “LOVE”. Only to later learn they are unable to purchase the home because of the daily changes taking place in the mortgage industry.
In the past a person wishing to buy a home only needed to be pre-qualified or pre-approved to get a Realtor to show them homes.
A pre-qual”if”ication is as states. a qualification based on what the prospective home buyer tells the lender. The “if” is in quotes because it is iffy at best.
A pre-approval in the is just one step above the -. A pre-approval usually requires the prospective to complete a loan application and permission for the lender to run credit.
The best way to ensure a home buyer does not waste time when searching for a home is to be approved unconditionally.
Approval unconditionally is best and includes all parts stated above, but goes further verifying the information on the loan application. The Loan officer will complete a loan package and have it underwritten by the investor that will loan the money for the home the home buyer will soon fall in “LOVE” with.
Some loan officers will say they do not have time. I say the home buyer does not have time to waste finding a home they “LOVE” only to be disappointed.
There are other advantages to to being pre-approved unconditionally. It will tell the seller of the home the buyer “LOVES” they are serious, serving as a negotiating term, saving the buyer time and money.
Money is saved because the seller feels like they can not let this one get away by countering back. Thus, accepting the offer of the buyer.
Time is saved because the lender has already had the buyer underwritten, There is no delay waiting for the package to handed back and forth figuring out what is missing. When the buyer has been approved unconditionally the closing happens very quickly. Often in 7 to 10 business days.
In conclusion contact a lender before looking. It will save Time, Money and Effort, not to mention disappointment.
The nation is requiring Realtors to be more professional and be more educated in order to provide assistance to home owners facing foreclosure.
The goal in a Short Sale is to create a win-win solution for the Home owner and their lender. The Realtors hopes are to be resource, providing the tools to assist the home owner negotiate away out of the home with the least out out their pockets.
What is a Short Sale? A short sale is an option to work out a plan when the buyer is no longer able to afford their home, and the equity on the property is too low to sell or refinance for the balance of the loan.
When does a home owner have a Short Sell? There is a Short Sale when the Lender agrees to take less that owed to avoid a foreclosure action or worse. Instead of buying from the home owner, the property is purchased directly from the bank at a discount.
What is the causes of a Short Sale? Short Sales happen when the homeowner losses a job, becomes ill, or has an option arm about to reset at a higher rate, have no assets to keep the home, and when the home is worth less than the amount mortgaged. When any of the above occur the lender will often take less than the full amount due. i.e, Short Sale.
How do Short Sales Work? Short Sales will only work with the cooperation of the Home owner, Realtors, and lenders. It is best to use a experienced Realtor with extensive knowledge in short sale policy and Procedures. Short Sales are an art that must be handle correctly. There may be only one shot at before impending foreclosure finally happens.
