My attention is not to simplify the process for foreclosures , but I have brokenthe home foreclosure process down into 4 basic steps. When you have an uderstanding of the foreclosure process it can and will help prospective investors to purchase houses at the best possible price.
1. Pre foreclosure- This can be thought of as the beginning, this is the stage which a property owner begins to miss payments and the stress of falling behind on their payments starts to rise up . Keep in mind that this stage is before any legal action has taken place . A home owner may be more likely at this time to consider any offer, specially if it means they have a chance to save their credit and avoid the foreclosure process. This is likely the best time to make a deal with the hard-pressed home owner and make this a feasible win-win situation.
2. Notice of Default- This is a formal notice to a borrower to notify him or her that a default has occurred and that legal action maymay proceed .
3. The foreclosure sale- Whether it is anon-judicial or judicial process depends on each individual state as each state can and does have different laws. The foreclosed property sale process in itself can take up to a year to complete. Quite often judicial foreclosure properties sales are held on the court steps as soon as a judgement has been reached.
4. Redemption period- During the redemption period, some states provide the house property owner the chance to get title back, provided that they pay the full total of the original debt and any new fees that they may have accumulated along the way.
Real Estate investors should and need to know if the foreclosed property they want to buy has a redemption period or not. As an investor , you don’t want to make any type of improvements to the property until you know for sure that it is yours. I’m going to repeat that so that there is no mistake. Never start any renovations or repairs until you lawfully own the house .