Frequently Asked Questions About Foreclosures
Get answers to some of the more frequently asked questions about the purchase of foreclosure properties.
What are foreclosed homes?
Foreclosed homes are properties which have been repossessed by the lender. A foreclosure takes place when the homeowner defaults on his or her loan payment. The lender might be a government agency, a bank, a mortgage company or another type of financial institution. A foreclosure is a legal procedure.
How can I benefit by buying a foreclosed property?
Many foreclosed properties are sold below market value since the lenders want to cover their losses as soon as possible. This means they try to price the property to sell quickly.
What are the stages in a foreclosure?
There are three different stages to the foreclosure process:
- Foreclosure: This is the first stage where the borrower/homeowner is given an opportunity to pay off the debt. They are given a grace period, which varies from 3 to 12 months.
- Sheriff Sale: This is the next stage. If a homeowner is unable to pay off the debt within the grace period then the property will usually be sold to the lender at the sheriff sale.
- Real-estate owned/REO: Once the lender receives the property from the sheriff sale, they will put the property up for sale to the public.
What does the lender do in order to officially foreclose a property?
To foreclose a property, lenders have to file a judicial lawsuit. These lawsuits generally last 12 months. The borrower has to resolve the problem or pay the debt within this period. If the borrower is unable to pay the debt, a lender will receive the property at a sheriff sale.
Is it possible to realize a profit from the purchase of a foreclosure property?
While there are no guarantees, it is possible to get a return on your foreclosure property investment. In many cases, you can buy a property at below market pricing. If there is any work to be done and you can do it yourself, you might earn even more.
How do I get started?
To contact one of our foreclosure experts, click here.
To use our foreclosure property search tool, powered by RealtyTrac®, click here.
If you would like to contact a Shorewest Customer Care representative for assistance, click here.