Re: Has anyone ever had to foreclose on a property??? - Posted by JPiper
Posted by JPiper on May 29, 2000 at 11:33:26:
How long it takes is going to be a function of your state law, whether there are redemption rights, and the actions of the borrower (whether they file a bankruptcy, etc). You need to check with an attorney in your state to find this out.
Cost is going to be a function of how the foreclosure is conducted…again, this varies by state. I did one on a first a couple of years ago for $1K…which I thought was very cheap. However, I’ve also paid $2K. If a foreclosure in your state requires a lawsuit, then it may well be more.
The highest cost will probably be your carrying costs and perhaps the repair cost when you get the property back. I used to figure if I were foreclosing on a second that I would have to feed the first for 6 months. That may not be long enough depending on your state foreclosure laws. Also figure the carry cost while you’re repairing the property.
Foreclosure properties are well known for being trashed and perhaps stripped. Having a feel for this number is quite important obviously, and can drive whether it is going to make sense to foreclose at all.
All in all, if you can get a deed in lieu of foreclosure it will probably make sense to do so. However, note that sometimes the borrower has other liens attached to the property. If that’s the case you’ll have to foreclose to clear those liens.