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