What You Need To Know About Real Estate Foreclosures

Many people today are losing their properties to lenders by foreclosure. Foreclosure is the legal definition for the process regarding the transfer of a borrower’s properties to a lender because the borrower wasn’t able to meet the terms of the loan repayment. The property is repossessed by a lender and it is auctioned or sold as a foreclosed property.

This article tries to give some general information regarding real estate foreclosures and other kinds of foreclosures in general. If one is buying foreclosed real property, he might want to spend a few minutes reading this article.

How Properties Are Foreclosed

A foreclosure action is usually initiated when a borrower isn’t able to pay up three mortgage payments. A notice of default will be issued by the lender against the real property. If the borrower is unable to pay up the debt, the lender will have the right to foreclose the property and sell it in a trustee sale.

Problems Regarding Buying Foreclosed Real Property

When we talk about something that is as risky as buying a foreclosed property, we might as well lay down the problems that might arise in this venture. Although one can have a great deal out of purchasing real property that is foreclosed, one must have a keen eye on the details.

A simple rule in buying foreclosed real estate property is- “beware.” There are not much available schemes for buying foreclosed properties in general, therefore, one must be very liquid and this entails a lot of disposable money. An impulsive buyer should be careful in engaging in auctions and sales of foreclosed properties. The title of the real property should be checked meticulously so as to avoid purchasing a deficient title. One of the more serious concerns that should be considered is that the condition of the property is not known well and usually, an inspection of the real property will not be possible before one purchases it.

Types Of Foreclosures

There are two main types of foreclosures out there, the judicial foreclosure and the non-judicial foreclosure of properties. A judicial foreclosure is a process by which a trustee, a mortgagee or a lien holder requests a sale of the property which is supervised by the court to be able to pay the outstanding balance of a debt. The non-judicial foreclosure action is a process wherein an owner of a real property sells under the power of sale in a trust deed which is in default.

How To Find Foreclosed Properties

If one is really interested in getting his hands on foreclosed real property, he should be keen and act fast because of the stiff competition in the market. In almost all states, notices regarding foreclosed properties can be found in the legal notices pages of the local newspapers. One can also spot a foreclosed property by taking a drive because they have notices in them (just like advertisements) saying that they are up for sale.

One can also go to the webpage of the U.S. Department of Housing and Urban Development where they advertise foreclosed real properties- http://www.hud.gov

There are a lot of foreclosed real properties out there, however, people should be careful and smart in proceeding with purchasing these properties. With the proper research and wise actions, one can actually get a great deal out of buying foreclosed real properties.

How to Buy Foreclosure Properties at Auction

One of the best known, but least understood, ways of buying foreclosure properties is to buy them at a live foreclosure auction. Depending upon where you live, a foreclosure auction will generally be held either at your county courthouse or in some other public place. Sometimes the auction will be conducted by the county sheriff and sometimes by a proxy appointed by the court. Regardless of who is chosen to conduct the auction, the result is the same: the property is sold to the highest bidder.

The first bid is typically made for the foreclosing lender by whoever is representing that company. The bid will generally be for the amount that's owed, although there doesn't have to be any actual exchange of money involved. If no one else puts in a higher bid, property ownership reverts to the lender.

In the majority of cases, no one shows up for the foreclosure sale except the proxies for the lender and whoever may be running the auction. That's especially true if there's no room for profit between what's owed and the market value of a property.

Make no mistake: foreclosure auctions aren't generally places for beginning investors, because you'll need access to either significant amounts of cash or a large line of credit that you can tap into quickly. If you have either of those resources at your disposal, you can sometimes find great buys at foreclosure auctions, but you have to be careful, because most of the time the amount owed doesn't leave much room for profit, if any. The properties that do contain a significant amount of room for a profit are most likely to be attended by a bigger group of investors. The key is to do your homework well, because a mistake can be very costly.

If you want to check into auctions yourself, the first thing you have to do is find out which publication is used to list them. Often it's the legal section of your local newspaper, although some larger cities use specialized business papers to advertise foreclosure sales. There are also various services that will notify you of foreclosures in your target area if you subscribe. If you happen to be interested in a particular property, you can contact the firm in charge of the auction for information about the time and place of the auction. Call the day before the auction to see if the defect has been cured or the sale has been delayed for some reason.

Always remember, if you bid, you must follow through with the purchase. There's no turning back once you've committed to buy a foreclosure property at an auction. So do your homework. It would be wise for you to choose a few target neighborhoods and specialize in those areas, so you'll know how much profit is available even before you consider bidding on a certain property.

Although it's rare, you can occasionally find some great deals at foreclosure auctions. If nothing else, you'll find it educational just to attend a few, just to see how the system works.

Copyright © 2006 Jeanette J. Fisher

Tips for Finding Great New Mexico Homes by Morgan Hamilton

If you are considering a move to the southwest, you should think about New Mexico. It is a large rural pace which has a lot to offer to the people living there as far as real estate is concerned. There are many year round outdoor activities, cultural events and celebrations. The prices of real estate are very different depending on the geographical location throughout the state. Santa Fe which is the capital of New Mexico is located in the north central part; Los Alamos is thirty minutes west of Santa Fe and a bit further on I-25 is Albuquerque which is the largest city in the state.

You have probably heard about Historic Route 66. It passes directly through Albuquerque where there are many nostalgic cafes and businesses along the route. If you keep on in south direction you will get to Truth of Consequences and then Las Cruces which is the second largest city in New Mexico. This is the place where I-25 ends and I-10 begins. Forty miles south are El Paso, Texas and the Mexico border. If you choose to go to the east, you will soon find yourself in Roswell and to the west, in Silver City located in the Gila Mountains.

After you got orientated in the state, let's have a look at the New Mexico homes opportunities. Buying a home in the north central part of the state, in or around Santa Fe and Los Alamos is quite expensive. However, if there is any chance you can afford it; my advice is to get a home there. You will be surrounded by magnificent mountains, high desert mesas and truly astonishing views. It is also a great idea to live further north, near the town of Abiquiu and the Abiquiu Reservoir. I am sure you are well aware of the fact that you can find New Mexico homes at a reasonable price when they are in town or surrounding areas but they get much more expensive when they are near the waterfront.

Have you ever heard of Georgia O'Keeffe? She is a very famous painter who used her Abiquiu ranch to draw her most astonishing portraits. In case you'd rather live in a bigger place, then consider Albuquerque. New Mexico homes vary greatly in price, so no matter what is your budget you can still find a home which would suit your needs as well as your pocket. If you have some extra cash, maybe you will like Las Cruces, known as being one of the class retirement destinations in the country.

The prime place to find great New Mexico homes if you're considering moving is the Internet. Hop online and view available New Mexico ranches, flats and land for sale. You can get all properties available for sale from the Multiple Listing Service. Accessing the MLS is easy; most of the real estate sites offer it. You can also view some virtual tours of New Mexico homes which is the second best in case you cannot go there.

If you're consider purchasing a home or a property, New Mexico is the right place to look for any. By buying a New Mexico home you will make a great investment. Not only will you be able to enjoy clean air and cosy life but you will also get three hundred days of sunshine a year. The weather in New Mexico is temperate all year round because of the mountains and desert serve. Thus, if you have the money, don't hesitate to buy a new home in New Mexico. You will never regret it.

Dreaming of buying property abroad? by Neil Cooper

Property in Spain, Ah yes, you remember the dream people had years ago about owning property in Spain, most discounted the notion, it was only for the wealthy, well time marches on, our attitudes change and most of us are a bit wealthier.

It is a fact that those who bought 20 years or even less ago are smiling and rightly so, overseas property values have soared, enabling many to purchase additional properties even in other countries, those who procrastinated must surely rue the day they hesitated and pulled back from the brink of opportunity and overseas property ownership.

Many people helped by rising property values in the UK have taken the plunge and invested in property in many parts of the world, and no wonder, with emerging countries showing property values rising almost daily. The eastern bloc countries show great promise as do more familiar countries such as, Morocco, Montenegro, Brazil, Dominican Republic, Bulgaria and the not so well known, Lithuania, Latvia, Ukraine, Belize etc.

The world these days seems a lot smaller than 20 or so years ago, what then seemed a dream is now everyday reality for many and more join daily. Statistics show that Britons purchase 1,000 homes a week overseas, with the old favourite Spain accounting for about 80% of sales, it's not hard to see why, with 300 days of sunshine a year, good infrastructure, excellent health service, lower cost of living, superb beaches, outstanding golf courses, restaurants to suit every taste and a quality of life style all contribute to make the country what it is.

But what of the other countries? Brazil offers some of the best beaches in the world and is only now being discovered by investors, Bulgaria offers excellent property for very little money, Latvia with price increases of 3-5% per month in some areas. Investors with say £50,000 could buy several opportunities and £100,000 could buy you an impressive portfolio of property investments worldwide.

Perhaps people disappointed with the UK pension fiasco in recent years should look no further than overseas property to provide financial independence in the future. Ah yes and back to the future, and dreams, are you going to just think about buying property abroad or will your dreams become a reality? Astrid Alauda said 'Dreams are free, so free your dreams' I couldn't have said it better.

How To Avoid an Investment Property Scam by Geoff Morris

To many people, taking the plunge, and investing in property for their future is a major leap of faith. Imagine how they must feel, if their investment turns out to be an investment property Scam?

Is there a way out of any Investment Property Scam?

The first thing to realise is that if you do feel you have been conned, you are probably not the only one. It may feel like it, and you may feel alone, stupid, cheated, and angry or embarrassed - some of the common emotions felt at this time.

But, these are the emotions that developers with crooked minds will encourage you to think. They hope that you will feel 'suckered', and just don't want to tell anybody. In fact, with a clever scam, there may seem to be nothing to tell anyway, apart from your gut instinct, until you start digging.

But inertia is just what these criminals (and they usually are criminals) want you to think. In these circumstances, you must not hold it all into yourself. You must try and find if other people have been duped into a similar situation. You never know, you may be one of ten, twenty or hundreds of similar souls, and if you can find, and become identified with such groups you will stand a far greater chance of getting retribution, believe me.

I got caught up in such an investment property scam about 18 months ago (I know - gasp - shock - horror - and I sell investment properties!). For some months, I thought I was going crazy, I could not understand why I could not get tenants in at anywhere near the prices I was expecting, or even get tenants at all. This was the first revelation, as I had been promised that the properties would have been fully tenanted on completion. Well, at least, that's what the brochures said, as well as the sales manager at the presentation I attended. And I had bought a number of these 'beauties' each supposedly fully tenanted and making me around £500 each per month rental surplus.

Then I started to investigate the situation more thoroughly, and I soon identified the problem. It's a down and out highly complex investment property Scam!

So how did I, an experienced property investor, and a reseller of investment properties - get involved in an investment property scam?

I'll tell you how - perhaps Criminal Intent?

What I have done is to chronicle the events that actually took place with my investments, of which I have since found out there were well over 100 similar incidents.

Before I went into this investment, or even recommended them to others, which consisted of a number of refurbished houses converted into HMO's for students (Houses of Multiple Occupation) I investigated the company thoroughly. (Note the company and location of these houses is not mentioned in this report for legal reasons). I checked out at least 6 of their property conversions, spoke to their rentals people, and spoke with several existing investors. I took my business partner at the time with me to check out my findings. I was also comforted by the fact that these people were spending (and still are spending) a lot of money in the big national newspapers (Sunday Times, Telegraph, and so forth), and had produced a whole range of glossy brochures backing up their claims.

Some of their larger off-plan developments were also being featured in a two-page spread in one of the UK's leading property magazines. Not only that, but they had (and still do have) very large exhibition stands at a number of the leading UK Property Shows.

Everything seemed to stack up, so I bought a number of them, and encouraged my friends, close family, and business colleagues to buy some also. I paid my reservation fees, and just settled down to wait for these to be completed, and to start generating some surplus cash every month.

The first event in the chain of things was that the houses were very late in being completed, so we were in danger of losing the student intake for autumn 2005, but the investment still seemed quite good, and anyway we had all exchanged contracts by then. And, of course, we all thought we had at least an 11% equity holding in each property, plus the usual growth of 4-6 % from last year. Also, when asked if we could inspect them prior to completion, we were told - "Sorry, as you have tenants in them, you have to give 48 hours or more notice". Then when we did try for appointments nobody could find the keys... Where were my alarm bells I hear you ask - Obviously on Silent Mode!

But then the dirt really started to rise to the surface...

These houses were all sold under the premise of 'All contacts for services under one roof for the investor - Use our Services for Sales, Recommended Solicitors, In-house Brokers, mortgages, Tenancy Management from our Own Company' - you know, a really good packaged deal for the armchair investor.'

Issue 1 was that the houses were not fully tenanted on completion, and in a lot of cases, the tenants seemed to 'melt away' after contracts had been signed. So much for the promises made in the developers' glossies that tenants would be in place before completion, with cross-guarantees so that there would be virtually no void periods, no issues with rent, as if one tenant failed to pay, the cross guarantees meant that the other tenants would be liable.

Also, in some cases, (not with mine luckily) no renovation work had been carried out at all, and the developers then had the cheek to ask for £3,000 per property to fix those that had not been done. Then, major issues with the building work started to surface. Basements would flood, not due to rain, (although this did happen on a number of occasions where the basements had not been 'tanked' correctly), but due to faulty plumbing, But if course we had a 12 month warranty contract - Right? Wrong?

Even after constant phone calls and emails, the management company failed to send us proper records, and they did not keep us informed of maintenance issues, tenants leaving, tenants not paying rent on time - all the sort of standard things one was used to expect from a 'proper' management company that charged 10% of the rent as fees.

And the hassle I had moving the management agreements to another company is another story for another day when it can be told.

Ok, so, this just seemed like rogue building work and an outright total lack of proper management by the department handling the tenancies. Not the sort of service to be expected from a firm carrying out so much nationwide marketing, but of course, being of such a high profile firm, you would have thought they would have fixed the issues. Right? Wrong!

So because of all these issues, I had by now started to do some very intensive investigation into this company, and the methods being used to package the sale of these houses.

It then transpired that most of these houses had been bought by the developer some three to four months prior to selling them, for about £90,000 - in the developers words - derelict houses that were totally gutted; 3 bed properties that had basements opened out, and or roof conversions done, so adding as many as 2, 3 or even 4 more bedrooms, and supposedly converted to the highest of standards for HMO purposes, and these were sold to us for around £249,950 up to £325,000 and higher.

Ding Ding Ding - Alarm Bells...

Why were we quite happy to purchase them - because they all came with RICS (Royal Institute of Chartered Surveyors) valuations on the property value and the anticipated rental incomes.

All of which matched the developers claims.

But when we noticed that several investors from other groups were having some of these similar houses repossessed - as they were not getting the rent, and consequently could not afford the mortgage, and the valuations were all coming in at around £80,000 to £100,000 BELOW THE MORTGAGE VALUE!

Our own investigations then uncovered that many of these properties had been valued by the same firm, and for comparison, they had used properties by the same developer on the valuation form.

We have come across instances where the mortgages that were granted they :-

· Were not valid for multiple occupancy homes - so why was a loan granted?

· Would not have been granted had the banks known the properties were already tenanted, and not sold as vacant possession. So why was a mortgage granted?

· Would not have been granted if the valuation rental assessment was not realistic. So loans were granted on incorrect information. If the investor had put the rental figures in, they would have probably been done for mortgage fraud.

· Would not have granted a loan (especially interest only) if the true valuation figure had been known.

· Would not have granted 85% of the assumed value had they known a Gifted Deposit was being paid (along with legal and other fees by the developer). The solicitor was aware, as was the broker, so how come the lender was not informed?

Now, as I like to think of myself as a 'savvy investor', knowing that gifted deposits, cash backs etc happen and quite often jump start the property market on the move, I had told my solicitor(s) what the side deal was, the broker told me what the deal was, so no problem right?

Wrong... I then find out that neither the solicitor(s) nor the broker had informed the lender.

Somewhere along the lines, something was wrong here.

The question is - Was it the fault of:-

· The Developer?

· The Solicitor?

· The Broker?

· The Investor?

In a society where regulations covering solicitors, brokers, mortgage loans, and valuers seem quite strict, I must say I think something is awry here, where the hapless individual investor can walk into such an unregulated trap!

If you feel you have been involved in such an investment property scam, and would like to see if there are others in the same boat, please visit my blog (; ) where you can voice your opinion, and even add your name to a structured list if you want so we can build up a database of like events that could be easily analysed to spot trends, or passed to 'Watchdog' for instance.

How To Buy Property For 50% Off The Asking Price by Jim Hart

People have different motives for buying real estate. Some want a home, some want to invest. The bottom line for everyone is to make money at some point in a real estate deal. Things like equity, appreciation and all the benefits of home ownership are important. But, the most important is EQUITY and the ability to convert that equity to cash when needed. So, how does a person develop a lot of equity instantly? By being a smart businessperson. Boil all the junk out of real estate and you will find that buying any real estate is a BUSINESS DEAL. You either make good business decisions or poor ones. You either win or you lose. You either make money or you lose money. The name of the game is buy low, sell high. That's the bottom-line right? Want instant equity? Here's one strategic approach:

1. Get you financing together and know exactly how much you can borrow for a home loan.

2. Write all your offers on properties for fifty percent (50%) of the asking price.

It is critical that you have gotten your financing together and are ready to go. When you write your offer, have a "this offer automatically expires within 24 hours" clause on your offer above your signature.

Agents MUST deliver all offers to the seller of a property. They have a legal duty to deliver the offer to the seller no matter how much the offer may be. They may act insulted, shocked, appalled, nevertheless they have to give the offer to the seller. This will result in two possible outcomes:

1. The Seller rejects the offer.

2. The seller accepts the offer.

If you are looking at a $100,000.00 home and you write the offer for 50% or $50,000.00 and the seller accepts--you just made $50,000.00 instant equity!

Why this can work: You don't know what is going on behind the scene with the sellers. Agents aren't going to tell you if the seller is weak. There are a number of reasons why a seller will "dump a property" for example 1. Tax problems. 2. Job loss 3. Inherited property, which they don't want or is to far away to maintain. Many times when a person is about ready to get foreclosed on, they will list the property with a real estate company for sale to prevent the lender from evicting them and seizing the property. Lenders are not property managers and this is a stalling tactic by those under economic duress.

Remember: Real estate agents are on mission-commission. They want to sell the property for as much as they can. The higher the selling price the higher the commission. This concept will result with your offers being rejected by sellers far more then accepted. In fact, you might write 50-100 offers before it works for you. Business is business. However, if you can make an instant $50,000.00 on a deal with this strategy, it's worth a few red faces! Better to try and fail then fail to try!

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