It has been a while since we have talked about the Foreclosures and where to find them on our Residential Real Estate blog for Santa Clarita Valley. There is no time like the present – so sit down, strap in and put in your mouthpiece – here we go.
Foreclosures – Bank Owned – Real Estate owned(reo)! These words all have something in common. They have all completed the foreclosure process. In fact, a Foreclosure, is a property that has completed the foreclosure process through the courts in a legal manner. Therefore a bank owned home, a real estate owned home, an investor owned home, and a regular “human being” owned home can all be “Foreclosures”.
If you had a home where you were allowing the buyer to finance through you – where you were acting as the bank – and that person stopped paying your their mortgage payments, you’d probably foreclose on them. You could do the entire process yourself, but we find the most effective “evictions” are done with the help of attorneys (go figure) You would now have a property that is a Foreclosure. It’s your foreclosure, but it is still considered a foreclosure.
Bank owned and Real Estate Owned, are Foreclosures that are owned by the banks. They had probably completed the eviction process, if there was someone not wanting to leave. Someone that liked to live but did not like to pay – etc. This type of property is not a foreclosure on the books of the bank.
Rentals can be foreclosures too. It would be the case of a private party (or corporation), owning a property, having it financed through a bank, the renter quit paying, the owner(human side or investor) quit paying, and the bank takes back the property. That would now be rendering as a “Real Estate Owned” property on their books(the bank that gave the financing…)
The question is always asked, “Are Foreclosures Better deals than standard sales?” That depends on the banks pre marketing and marketing strategy. Visa Versa – it depends on the “Standard Sales” pre marketing and marketing strategy. There are a lot of banks that price their Foreclosures anywhere from 2-5% below fair market value. This is due to their agent being instructed to give the price based on a 90 day in the future estimate of value. That 90 day in the future thing depends on whether we are increasing or decreasing as a real estate market.
How to Search for Foreclosures? Click here to view the current on-market foreclosures and bank owned inventory.
Pre-Foreclosures – These are properties that have not completed the foreclosure process as of yet. They are typically Short Sales in nature. They also are in the process of having a NOD, notice of default, filed on them. We do a special approach for our buyers of real estate with regard to these property types. Click here to view our One Party Show Page and Video.
That should get you on your start quite well when it comes to getting a better grasp as to what these different “distressed” types are. Be Safe – please let us know when we can help you with our “Santa Clarita Real estate crash course“.