If you are looking for a deal on the next home you buy, you might be considering a foreclosure property. However, you may be wondering at what point in the foreclosure process you will be able to buy the property. It is possible to buy a house that is in foreclosure at 3 different stages of the process.
3 Stages of Foreclosure
The Pre-Foreclosure Stage
The pre-foreclosure stage is the earliest that you are able to buy a house within the foreclosure process. This stage occurs after the property owner has been provided with a legal notification that the foreclosure process is going to begin. At this point, the owner has the option of curing the default and getting their loan back in order. If the owner is unable to do this, they could choose to sell the property from the list of foreclosure properties before the mortgage holder is able to foreclose on it.
It is generally rather difficult to buy a property at this point of the foreclosure process. This is due to the fact that you will need to look at approaching the owner before the property is listed for sale and offer to buy it outright. Time and a smooth transaction will be the key to a successful purchase at this point.
The Foreclosure Auction
If the owner is not able to hold onto the property, it will generally be placed up for sale in a foreclosure auction. Foreclosure auctions need to be handled correctly as you do not want to get caught up in a bidding war. This will result in you paying more than you should for the property that you are buying.
The problem with buying a property at a foreclosure auction is the fact that you generally have to pay cash at the time of the purchase. You will also not be given much time to research the property before you start bidding. Additionally, you will assume all of the risks of anything going wrong with the title or condition of the property. Buying at a foreclosure auction is not for the faint of heart and comes with a lot of risks.
Buying Foreclosed Properties
When a mortgage provider takes control of any property, their end goal will be to sell it so they can make back their unpaid loan. The key here is patience as this process will take a fair amount of time. When you buy a foreclosed property, the entire foreclosure process will be complete.
If you are in a hurry to buy a property, this stage will not be the right one for you. Additionally, if you are not an expert in real estate law, you will need to hire an expert to help you buy a foreclosed property. These properties will also come with a range of problems as they generally stand empty for a prolonged period of time.
While it is possible to buy a house that is in foreclosure, you need to be careful with this. Buying a house in pre-foreclosure requires speed while buying at a foreclosure auction comes with a number of risks. Purchasing a foreclosed property will also come with risks as the property will generally be in bad condition.