After the great crash, no matter what the price point of the buyer. Buyers still think they want to see foreclosures. A foreclosure is priced below the market value. Buyers can often get more bang for their buck.
You Can’t Buy a Foreclosure!
Foreclosure is a process not a status of a home. 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. The process starts when the homeowner is behind on the payments.
In Central Oregon most mortgages are actually Trust Deeds. If there is a 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 judicial foreclosures there is a 180 day redemption period for the owner of the property. This allows 6 months after foreclosure the past owner can go to the bank and pay the loan in full along with the cost of the foreclosure process. And regain ownership of the home. Many homes that go through this process will sit vacant until the bank can give the new buyer a clear title.
Once an 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.
It May Not Be For Sale!
Foreclosure is a process and not necessarily for sale. I was looking through Trulia and reviewed a couple questions that the general public had asked. I noticed a common thread, there are a lot of buyers out there looking at these Foreclosure homes and asking for information. These sites show addresses 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. If the house is for sale, it will MOST likely be 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