I am a foreclosure virgin. All the wisdom I gained from past real estate closings got chucked out the rear window when I boarded the foreclosure train. Things like common sense and order and timeliness – all gone.
There are different stages and kinds of foreclosure, so it is important to recognize the stage of the process for the property you are buying. I have friends who have tried to purchase short sales. That is when a house is for sale at a price that is less than the balance owed to the bank – kind of the teensy baby sister of a full-blown foreclosure. Their experiences with short sales have been akin to chewing glass. Neighbors of mine put in a bid on a short sale house. While they were waiting for the bank to agree to the sale, they listed and sold their house, moved into (as tenants) the short sale house which, during that time had become vacant, waited six more months for the bank… and ended up waiting so long that they got completely fed up and bought the house next door to the short sale the day it went on the market.
Some short sales go right through. It depends upon the property.
Then there are pre-foreclosures. I have absolutely no idea how those work.
I am buying a bank-owned property. I’m told there are different ways a bank can own a property, too, but I only know about mine. The owner of the property borrowed a bunch of money when times were good, and when times got bad couldn’t pay it back. The bank agreed to take title of the property instead of a lengthy court process – this is called “deed in lieu of foreclosure.”
As far as foreclosures go, my attorney tells me this type is the “most simple.” I regard it as simple in the way crossing Death Valley on foot by walking along the shoulder of the highway is simple, as compared to hiking across the desert of Death Valley barefoot with no water and no map followed by a flock of vultures is not simple. Either way you are likely to bite the dust before reaching your destination.
Tomorrow I’ll talk more about the process of putting in a bid. Till then, go get a nice drink of water, and for god’s sake, keep your shoes on!