Preforeclosures are properties before they foreclose. Real Estate Investors that get the great deals on foreclosures houses purchase preforeclosure houses. A pre-foreclosuer is a property in distress, that will foreclose unless something is done to bring the mortgage loan current. There are three main stages of preforeclosure properties:
Loan in Distress
Notice of Default - Purchasing "Short Sales"
Notice of Trustees Sale or Foreclosure Auction
Distressed Borrowers...
Foreclosure really begins when borrowers are in financial distress, and miss a mortgage payment. Banks won't usually do anything until several payments have been missed, but technically can begin the foreclosure process as soon as the due date is missed. This is the earliest stage of the foreclosure process and can only be identified by personal knowledge of distressed borrowers, referral's, or possibly insider information from a bank. Some times homeowners will realize their financial distress and attempt to sell these houses. They are usually hard to identify at this point unless the borrower owes more than the house is worth and must sell it as a Short Sale.
Short Sale Houses
In a Short Sale, the bank forgives a portion of the debt so it can sell rather than foreclose. When a house is in short sale status, the borrowers often try to sell these houses for sale by owner because they realize they have no equity, and can't afford to pay a Real Estate commission. Smart sellers in distress realize they need a Realtors help. Especially a realtor who specializes in Short Sales and foreclosure homes. Houses listed by realtors and on the MLS are usually identified as "short sale" houses. These properties are sold as is, and usually have comments like "motivated seller."
Are banks eager to do short sales?
A. No, and most of the people you'll talk too are not that motivated to get things done. But a bank would much rather do a short sale than let the property foreclose in most circumstances. When speaking to banks to discuss short sale possibilities make sure you speak to the loss mitigation department.
How low below the amount owed will banks go for short sells?
A. It depends. A lot of the times banks won't budge, but in some instances they'll go up to 30% below amount owed to get the property off their books. In most instances you're doing good if you can get them down 10%. Depending on how many loans are on the property the primary lender usually won't go down at all until the junior liens take a cut first.
After a distressed borrower has missed about 4 payments, the bank will issue a Notice of Default. The certified Notice of Default tells the borrower that if they do not bring their loan current, the house will foreclose. These notices become public record. They are posted at the county courthouse. You can also get access to these records on online foreclosure sites like foreclosure.com, realtytrac, and bargain network. These services offer a one week free trial period. If you like the service, and find it valuable there is a monthly charge. Personally I like bargain networks service the best. Its format is the best. With that said, Foreclosure.com's service provides the most information without having to pay anything. In many small Idaho towns, the information given without the paid subscription is often sufficient to identify and contact home owners who have received notices of default.
These services also provide valuable information and can give you email updates anytime a new preforeclosure or for sale by owner property is found.
How do I contact owners in default?
Some try door knocking. Some use mailers, some make phone calls. RealtyTrac has programs and campaigns to help you contact default owners to find out if you can purchase those distressed homes.
Notice of Trustee Sales/ Foreclosure Auction
If the loan is not brought current. Aproximately three months after the notice of default another official notice is given. The "notice of trustee's sale" or the foreclosure auction. This notice is posted on the borrowers property, at the courthouse, and in a newspaper. This notice states that the house will close in 28 days. This is the desperation point for foreclosure sellers and many investors with cash like to step in and relieve them.
How do I purchase properties at a foreclosure auction?
Trustee sales usually take place at the court house steps of the county seat. This is a public auction, and anybody may bid on the house to buy a house at a trustee sale you should know that:
You must provide $5,000 certified funds prior to bidding.
Must pay off the entire purchase price in full within 24 hours.
Properties sold at the public auctions are sold without warranties. There still may be liens and judgements tied to the property. The properties might even still have residents needing eviction. Some liens such as second mortgages will sometimes be shafted.
Courthouse sales are not the most reliable auctions. The date posted in the newspaper is very often postponed or canceled because of bankruptcy filing, postponement, reinstatement, repayment, Deed-in-lieu of foreclosure, or sale.
You can find preforclosure homes in Arizona in:
Arizona
Phoenix Area
Pinal County
Apache Junction
Arizona City
Casa Grande
Coolidge
Eloy
Florence
Gold Canyon
Maricopa
Queen Creek
Maricopa County, AZ
Ahwatukee
Anthem
Apache Junction
Arlington
Avondale
Buckey
Carefree
Cave Creek
Chandler
Desert Hills
El Mirage
Fountain Hills
Gila Bend
Gilbert
Glendale
Gold Canyon
Goodyear
Higley
Laveen
Litchfield Park
Mesa
new River
Paradise Valley
Peoria
Phoenix
Queen Creek
Rio Verde
Scottsdale
Sun City
Sun Lakes
Surprise
Tempe
Tolleson
Tonopah
Waddell
Wickenburg
Wittman
Youngtown
Tucson Area
Pima County, AZ
Corona de Tucson
Marana
Oro Valley
Sahuarita
Central Tucson
East Tucson
North East Tucson
North West Tucson
Southern Tucson
South West Tucson
Western Tucson
Northern Tucson
Vail
Pinal County AZ
Marana
Northeast Tucson
Nevada Foreclosure Auctions can be found in Clark county seat for the cities:
©2008 Alan Sharp Barker, Realtor, Barker Real Estate, forecloser finder.