| There are many properties in some stage of | | | | from the normal. First of all there are some |
| foreclosure or taken back by lenders at this | | | | different types of 'foreclosure' properties |
| time and a lot of buyers ask about these | | | | and I want to start off by clearing this up |
| because they've heard about how this is where | | | | for you. There is a 'pre-foreclosure'. This |
| you can get an incredible deal. After more | | | | is a property where the owner has fallen |
| experience with these types of properties | | | | behind on their payments to a point where the |
| I've found that there is a lot of false | | | | bank has begun the foreclosure proceedings |
| information and hype out there and want to | | | | (usually by filing a notice of pending legal |
| provide you with some more information that | | | | action). There is a 'short sale'. This |
| can help you understand this whole subject a | | | | generally means a pre-foreclosure property |
| little better. During the boom years there | | | | where the property is being listed at a price |
| were tons of seminars and books on how to | | | | that is less than what is owed on the |
| make a fortune in real estate by buying and | | | | outstanding loans. You can recognize these in |
| flipping houses. Though some people were able | | | | listings as it will either say "short sale" |
| to make good money quickly that way during | | | | or "3rd party approval needed" or "list price |
| the period of about 2003 to mid-2005, many | | | | may not be sufficient to cover all |
| others are now part of the foreclosure | | | | encumbrances" (meaning that the bank will |
| statistics. Similarly, there are now lots of | | | | have to approve it in addition to the seller |
| websites, seminars, books, etc. on how to | | | | accepting the offer). One word of caution |
| make your fortune buying foreclosure | | | | though, some realtors will list a property as |
| properties. They present stories of | | | | a short sale or "possible" short sale without |
| exceptionally good situations that make it | | | | even having their client complete a "short |
| sound like this is how every foreclosure | | | | sale package" (the paperwork that will have |
| situation goes even though it is really more | | | | to be submitted to the bank with any |
| of a rare occurrence for the average person. | | | | contract) - avoid these as in most cases they |
| Maybe these are the same people who promoted | | | | end up going nowhere or take months to hear |
| the seminars and books on "flipping" (and | | | | anything back. There are also "bank-owned" |
| maybe they are also the ones who email you | | | | properties. Bank-owned means the bank has |
| about winning the UK lottery or about the | | | | completed the foreclosure proceedings and now |
| $50Million they want to send you from | | | | owns the property fully. These are usually |
| Nigeria:). That's not to say that there | | | | the easiest and quickest of the different |
| aren't good deals available in properties | | | | types of foreclosure properties to deal with |
| that are in some stage of foreclosure, there | | | | although they are sometimes (not always) in |
| are. For example, in March I saw a condo in | | | | pretty bad condition. That gives you a basic |
| Palm Harbor priced $25,000 less than the one | | | | overview of the types of "foreclosure" |
| a client of mine bought last year (which was | | | | properties you may run into. In Part II, I'll |
| already $50,000 below what they were priced | | | | go over some information that will be |
| for in 2005). But this current one also has a | | | | important to know if you are considering |
| garage and upgraded kitchen countertops and | | | | purchasing a property in any stage of |
| cabinets (which my client's condo didn't | | | | foreclosure. |
| have). Another example is a house in Dunedin | | | | |
| that one of my clients is buying which is | | | | To search the MLS for Clearwater Florida and |
| priced about $20,000 less than comparable | | | | the surrounding areas and get a monthly email |
| properties in the same area and is in good | | | | newsletter to stay current on how the real |
| condition. So it is true you can find some | | | | estate market is doing in that area you can |
| properties that are good deals. BUT - there | | | | visit Ron Nedd's website: and register for |
| are some things you'll need to understand | | | | both MLS access and the newsletter. |
| because the process can be quite different | | | | |