What are the different stages of foreclosure, and what do they mean?
Dec 27, 2008 in
Financial and Loan Tips
juicyfruit
I’m interested in buying a home in foreclosure, but I don’t know what the different stages are or what they mean. I’ve seen “notice of default”, “real estate owned”, “notice of foreclosure sale”, and “pre-foreclosure.” Can someone please tell me the stages (from beginning to end) and what that means to me as the potential buyer? Thanks.
I’m interested in buying a home in foreclosure, but I don’t know what the different stages are or what they mean. I’ve seen “notice of default”, “real estate owned”, “notice of foreclosure sale”, and “pre-foreclosure.” Can someone please tell me the stages (from beginning to end) and what that means to me as the potential buyer? Thanks.
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3 comments
mr_tasty_phlegm on December 28, 2008 at 4:51 pm
If it is going to the sheriff’s auction, it is pretty much a done deal. Once you purchase the home, everything in it is yours. You must be careful to do your research to determine if there are any liens on the property…because if you purchase the house, you are now responsible for any liens owed. Pay for a title search…it could save you some big bucks in the long run.
wonderingunhappily on December 30, 2008 at 10:23 pm
NOtice of defualt is the first step to foreclusure. That’s the lender telling the borrower that he missed a few payments – and that foreclosure is coming.
Real estate owned (REO) is the bank owning a foreclosed house.
Pre forclosure is the best time to buy the house. You can often negotiate with the bank at this time and get a good deal. Remember, good terms are better than a good price.
Notice of foreclosure sale is when there is usually an auction after the house was foreclosed and the bank is trying to sell it to the highest bidder. Don’t try to buy here – there will be tons of people at a foreclosure sale and they call came with mega bucks to plop down on the house. Also they are usually all cash deals.
Good luck – and follow the pre foreclosure route. The others might work for you, but only rarely.
As an investor I will tell you that if you are sking this question, you really are not ready to invest. Read up – learn more and then go for it. Good luck
lu_candid on January 2, 2009 at 10:22 pm
Sure… Well, you receive a notice of default when the bank says you have missed payment long enough. Normally the home will be in pre-foreclosure for around 3 months after the NOD was issued. The notice of the foreclosure sale occurs somewhere in that 3-month period. Then there is the foreclosure sale- an auction. If nobody purchases the home at auction or at a trustee sale then the bank takes possession of the home making it “bank owned” real estate.
Good luck. Here’s a great website to help you find the perfect home… in any stage of foreclosure.