Guide to Foreclosure

Aug. 14, 2006 12 AM PT

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Guide to buying homes in foreclosure:

Purchasing a home that is in the foreclosure process can be profitable for the buyer, even if it appears the home has accrued tremendous debt.

Here are a few tips on how to purchase a home for below-market price.

To maximize the bargaining advantage at the start, potential buyers can get a list of homes in the foreclosure process with all the details through a paid-subscription company, like County Records Research.

Buying while a house is in the default:

Approach the seller directly, even if the house is listed through an agent.

Be patient if you know the home is in foreclosure. Every day that goes by puts the potential buyer in a better bargaining position.

Usually the buyer will not assume the loans, but will take over payments by taking title subject to existing loans.

After the agreement is made, open an escrow to process the paperwork.

Buying at auction

When a property reaches the actual auction date, all the loans subsequent to the one that’s in foreclosure disappear for the buyer, so it’s important to know which loan is in foreclosure.

The bidder who wins at auction will only pay the foreclosing loan and will assume payments on any loans that came before it, so if the third loan is in foreclosure, check to see what kind of payments will be assumed on the first and second.

Buying after the auction has passed

Often no bidders show up for an auction so the lender assumes ownership of the property.

On the same day of the sale, approach the trustee who processed the foreclosure and check if the property was sold at auction.

If it was not sold, approach the lender with a below-market offer.

After auction day, the lender will many times hire a lender and the property will be listed at market price. It may help to tell the lender you’ll take the property as is.

â€” Kurt DeMeire, chief

executive officer of County

Records Research

Guide to Foreclosure

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