Posted by JT-IN on March 09, 2002 at 07:54:34:
I usually buy at the Sheriff’s auction, however, there are a handfull of purchases I make, prior to the auction, each year.
The foreclosure buying game is fairly complex, dealing with lawsuits, (depending upon which state, and whether judicial of trustee sale), and legalities. There are advantages and disadvantages for each type of purchase, at auction and pre-sale purchase.
The process is quite technical, due to the legal dealings, and quite cash intensive, due to the fact of buying for all cash at auctions; (this is the norm, vs. the ability to finance, as a usual pruchase). The process is highly information driven. The more data that you can evaluate prior to the sale, will allow you to understand how the Plaintiff, (or Lender) will proceed in any bidding, or even if a forebearance (a deal for the back payments) can be worked out.
Foreclosure buyig can be a high-risk approach. There is much to know. You are dealing with folks in severe financial crisis who may have other skeletans in their closets, which could relate to a title problem, if you don’t thoroghly do your homework. Also, it is difficult to be certain that you are getting a clear title even at auction, due to the fact of a missed step on the Plaintiff’s part; should they have missed notifying a lien holder, then this lien will survive the sale, and be passed onto the new owner; ouch!
So, I would equate the process to walking through a mine field. If you know where the hazards lay, then you finesse yourself around them; if not, you become a casualty. There are more ways to financially die in the process, than to succeed; realistically, but then again, it is an arena where tremendous profits can be made, and that is what attracts me to the game.
Just the way that I view things…