foreclosure sign

Understanding Foreclosures

Many people imagine that it is a walk in the park to buy and sell property near foreclosure. However, if it is not mutually beneficial to both the distressed owner and the investor; it can be stressful. Foreclosure represents the bad side of home ownership. It happens when someone has undergone a terrible blow in their finances, and they can no longer afford it. It can, if allowed to, finish the home’s equity and destroy the owner’s credit rating.

However, in Hillsborough County, property foreclosure can have an upside. The two—​parties investor and the homeowner—can profit. If it is done promptly, even the credit rating of the homeowner can be spared. If you want to buy and flip a property, the following are the three ways you can go about it:

Pre-foreclosure

Here, as an investor, you can invest while helping a distressed homeowner. During this stage, there is little harm done to the credit rating of the homeowner. When you buy a property before foreclosure, it means that the home is transferred to you, at a time that you agree upon with the owner of the house. At this time, the homeowner no longer needs to involve a lender. To locate leads to make this kind of investment, one needs to work with attorneys and real estate experts. One may also consider equity of redemption.

Foreclosure Stage

When you buy a property at this stage, it has already been foreclosed. Most investors get information about these types of investments from the County clerk. Notices will be filed by default, but one has to figure out how to comb indexes to find pending sales. Sometimes one may even get addresses that have been listed on advance notices. Many title insurance businesses will be willing to work with investors toward making this investment.

Note that different states will have different processes for foreclosure. If you are in a lien state, a legal form is often involved. These foreclosures are usually connected with mortgages and will often take a long time to finish. A non-judicial foreclosure has trust deeds and will take a maximum of four months to complete. This time starts after the borrower defaults their payments. At this stage, the property is auctioned to the investor with the most money.

Post-foreclosure

house property

During this stage of foreclosure, the lender is already controlling the property. One has to deal with the real estate owned (REO) department to buy this property. Sometimes one has to attend an auction. To participate, one needs to look at the notice for foreclosure to know whom the mortgage is owed. Losses and overhead involved in REO often mean that a bank will negotiate with a willing investor. You can make an offer and get the process started.

A choice any investor must make is the stage they want to enter foreclosure. Identifying the steps is not enough; one must also determine at what stage they will make the most profits. In the end, you want to pick investments that make business sense.