So You Want to Buy a Foreclosure!

Thesa Chambers February 15, 2017

 

In all honesty the current real estate market in Central Oregon has brought out a series of buyers that vary almost as much as the Central Oregon landscape.  One common thread Realtors® hear no matter what the price point of the buyer or the type of home a buyer might like is that they would like to see foreclosures.  The public knows that a foreclosure is priced below the market value and that they can get more bang for their buck.

You Can’t Buy a Foreclosure!

Foreclosure is a process not a status of a home.  As an experienced real estate agent in Central Oregon, I don’t correct my buyers when they say they want to see foreclosures, I show them Bank Owned Homes or homes that are also known as REOs (Real Estate Owned).  A foreclosure is the process that a bank, homeowner and property go through when the homeowner is behind on the payments.

In Central Oregon most mortgages are actually Trust Deeds, meaning that if you default there will be a process that leads up to a Trustee’s Sale. After the recent crash of the real estate market Oregon has seen many judicial foreclosures. With these foreclosures there is a 180 day redemption period for the owner of the property. Meaning that for basically 6 months after foreclosure the past owner can basically go to the bank and pay the loan in full and the cost of the foreclosure process and presto the house is there again. With that being said many homes that go through this process will sit vacant until the bank can give the new buyer a clear title.

If a property is going through the Trustee Sale, once the owner is 90 days past due the bank can issue what is called a Notice of Default.  At some point during this process your lender will turn the information about the default out to the public. That is where websites like RealtyTrac, Zillow and Trulia (Zillow and Trulia appear to actually get this information through RealtyTrac) pick up homes that are listed as FORECLOSURES.  These homes are often listed on these sites with a price of half what other homes are selling for or obviously great deals.

It May Not Be For Sale!

This week it became painfully clear to me that the public needs to understand that those websites out there that show homes in the foreclosure process that are not for sale. I was cruising through Trulia and had answered a couple questions that the general public had asked to have answered, something I do occasionally.  (sometimes it is fun to see out of area agents try and explain things from Central Oregon they can be pretty humorous) Then I noticed a common thread, there are a lot of buyers out there looking at these Foreclosure homes and asking for information.  Sometimes the addresses are listed a price and even a photo, why would a buyer not think they could buy this home.

Beware of Owner!

So let’s say that one of those homes really peaked the interest of a buyer.  Saturday rolls around and the family is out for a drive and the parents say, oh that house we saw online last night is in this neighborhood, we should stop and take a look.  They pull into the driveway it appears the house is vacant, the yard is slightly over grown, there seems to be signs of disarray. When people get into financial trouble, they often give up or sink into depression.  Back to our happy buyers, they pull into the driveway, and the kids start running around the yard, mom is working her way around back to look in the kitchen window and dad is heading for the window on the side of the garage, just then he hears a voice (or a gun being chambered) can I help you?

No Sign – No Agent – Generally Means Not For Sale

On these foreclosure properties, the home is generally worth less than is owed, so if the house is for sale, it MOST of the time is listed through a real estate agent.  If this home is not upside down it might be a for sale by owner, or it simply may not be for sale.  Just because a home owner gets behind in their payment does not mean they will lose the property.  Home owners do find ways to bring the payments current, or have the bank modify their loan.

List of BANK OWNED HOMES

La Pine Bank Owned Homes

Three Rivers South Bank Owned Homes

Sunriver Bank Owned Homes

Bend Bank Owned Homes

 

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  1. Exactly! A house is always owned by somebody even if’s a bank. If the house is in transition it doesn’t mean you can go invading the place! Sometimes the neighbors will chase people off as well. In Southern Colorado I’ve heard of more than one instance where I gun was pulled.