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Buying or Listing Foreclosures before the Auction: Pre-Foreclosures and Short Sales
The period after the NOD is filed and before the auction is typically referred to as "pre-foreclosure." It is a period that offers the most options to licensed agents and investors, and those who are specialists will profit greatly. Investors and realtors have the opportunity to purchase or list the home at under market value, regardless of equity. For those homes that don't have sufficient equity, a short sale is an important strategy to employ. In any event, direct and early contact with the distressed property owner provides the greatest path to success.
Now a matter of public record, a homeowner in pre-foreclosure is approached by many 3rd parties to assist them with their situation. However, only those who are educated, knowledgeable and ethical will succeed in converting these leads to viable deals. There are also various laws for investors and licensed agents to follow, as missteps can have catastrophic results and homeowners only want to work with professionals who have been through training, and that can both deliver on their plan to help as well as be empathetic to the homeowner's unfortunate situation.
Contact with a homeowner as early as possible in pre-foreclosure will grant the most options for the homeowner and time for everyone to execute a plan. Accurate and complete data is essential, as incomplete or inaccurate data will lead to loss of time and loss of options for homeowners, licensed agents and investors. RETRAN has been providing the most complete and accurate data in the industry for over 20 years.
Buying Foreclosures at the Auction: Trustee Sales
Buying homes at foreclosure auctions can be very lucrative. When a solution is not reached for a distressed loan during the pre-foreclosure period, the home is sold at auction to satisfy the delinquent debt. Auctions are typically held at the steps of the County Courthouse, and hundreds of viable properties are being sold at the Auctions every day. Although auctions are open to the general public, this is a highly-specialized form of acquiring property and is not for the novice investor.
Things to consider when investing in Trustee Sales include the fact that all properties bought at auction must be purchased for all-cash, they are purchased subject to all senior liens, title insurance will not likely be available upon purchase, and the new owner will be responsible for removing hold-over tenants. This can be a problem for beginners or part-timers that don't have the requisite knowledge or time needed to run these deals.
Although buying properties at the Trustee Sales is a highly specialized skill, when done right it can uncover some of the most lucrative deals with the quickest turn-around . If you decide to work this stage of foreclosures you should get specialized training and secure access to cash through investors, credit, loans, savings, 401K, or any other legal source, to become qualified to buy properties in this way. Once you have the money, and can commit the time, get the training you need before bidding on any properties.
Using the most accurate and complete data is essential to an auction investor's success, ensuring that you spend your time only pursuing deals that will be profitable. RETRAN offers you the proper information and training that you will need to gain the competitive advantage in Trustee Sale Investing.
Buying or Listing Foreclosures after the Auction: REO’s
REO stands for "Real Estate Owned” and refers to a property that reverts to the bank and becomes inventory when it is not sold at auction. Properties revert to the bank for a variety of reasons, and we find more REO's as the market continues to cool and homes have less and less equity.
Because banks are in the business of lending money, and not in owning and managing real estate, there are deals to be made with banks by acquiring property at a significant discount or by listing properties for sale. Typically, investors buy the property below market value and agents will have a commission, often in excess of market standards, to list the property. Additionally, those who prove themselves capable and ethical will find themselves with an ongoing pipeline of deals. Whether an investor or licensed agent, you benefit by getting a great deal and the bank benefits by working with a knowledgeable professional to help them through a costly process.
It is for these reasons REO properties are coveted by investors and agents alike … but how do you find them and develop the necessary relationships to get the deals? As with all other strategies involving distressed properties, only those individuals who arm themselves with the proper education, process and data will succeed with REO’s.
RETRAN is the trusted leader in this industry, and will provide the data and training you need to succeed legally and ethically.
