What is a foreclosure?

Foreclosure is the legal and professional proceeding in which a mortgagee, or other lien holder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lien holders can also foreclose the owner’s right of redemption for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue HOA dues or assessments.

How does foreclosure happen?

The foreclosure process as applied to residential mortgage loans is a bank or other secured creditor selling or repossessing a parcel of real property (immovable property) after the owner has failed to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, the lender can sell the property and keep the proceeds to pay off its mortgage and any legal costs, and it is typically said that “the lender has foreclosed its mortgage or lien”. If the promissory note was made with a recourse clause then if the sale does not bring enough to pay the existing balance of principal and fees the mortgagee can file a claim for a deficiency judgement.

Should I buy a foreclosed home?

If you are looking for a good buy, then look for foreclosures. Portland has many foreclosures to choose from and best of all banks often sell a home for less than fair market value. It isn’t making them money, in fact; they have lost money on it, so they will sometimes even negotiate on the asking price. If you can buy a home on a foreclosure home listings for less money than the home is worth, you have made money on the home already, whether you sell it or not.

What to look out for while buying a foreclosure

1. Repairs: Roof, appliances,Air Conditioner,termites,mold,and structural damage need to be carefully inspected. Banks sell these homes in “AS IS” condition.
2. Back Taxes: Check with the county in regards to back taxes owed.
3. Special Contracts: Majority of Banks insist you use their contract “To Purchase”,
4. High closing costs: Negotiate for the Bank to pay for Buyers Closing Costs.
5. Repair Costs: Have someone who can give you a “Dollar Amount” on what it costs to repair the home you. Add that to the budget.

Buying a foreclosed homes has become so popular that there are even TV shows based on buying them, fixing them up, and sometimes putting them back on the market to make a quick profit. Whether you are interested in purchasing a foreclosed home to sell or to live in, foreclosure sales in Portland are a great way to pick up a property for less than fair market value.

Should I buy a home at a Foreclosure Auction

Savvy real estate investors elect to purchase homes in the pre-foreclosure stage via the short sale, most choose to avoid this lengthy process by sticking to homes which the lender has already completed the foreclosure process. Once a lender forecloses on a property, the maintenance of that property becomes the responsibility of the lender. As you can assume, the lender wants to make money off the property, not invest in its upkeep. Because of this, if a lender puts a home on the market via a conventional Realtor, they will not want to keep it on the market for long, and will eventually opt for a foreclosure auction to unload the property to the highest bidder.

Don’t Pay for Foreclosure Listings—They’re Free!

There is no need to spend money on lists of foreclosed homes offered on the web, because if you are truly interested in purchasing a foreclosed home, there are many ways to get these for free. These homes are public record and can be obtained simply by contacting a real estate agent, title company county sheriff’s sale office, by visiting government websites, or the websites of the auctioning agents.

Foreclosure Auctions Offer Great Deals on Properties

Foreclosed homes can be auctioned for less than fifty percent of their fair market value. Steep dicounts are taken off the fair market value of the home making them a substantial investment. Contact me directly and request a free consoltation at 503.332.9777.

Tips for buying a Foreclosure in Portland

1. Learn about the different types of properties and the foreclosure process.
Not all foreclosures are the alike! Educate yourself on the difference between the three basic types of properties, including notice-of-default (NOD), notice of trustee sale (NTS), and real-estate-owned REO, as well as the positive and negative aspects of buying at each stage of the foreclosure cycle.

As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution.
2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate.
3. Engage a real estate agent as a “buyer’s representative”
There’s a distinct difference between a buyer’s and a seller’s Agent. A Buyer’s Agent has the home buyer’s interests at heart, and are charged with finding the right property and negotiating the best price for their clients. Picking the right real estate agent will make your life much easier. Ideally, select an agent who specializes in the foreclosures.
4. Do your homework
Purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties. But, with that risk comes reward in the form of much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. As with any purchase, timing is everything! But, it makes sense to give any property under consideration a thorough examination, including determining its condition and value, finding out the amount in default and the remaining loan balance, and running a legal investing report to make sure the property is free of any financial liabilities. Of course, it never hurts to foster a positive relationship with the seller!
5. Make a realistic offer
If you want to be taken seriously as a buyer, you must be realistic when preparing an offer. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. Additionally, homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.