Are you a savvy real estate investor? If yes, buying foreclosed properties in Florida are a lucrative way of making money. Regardless of whether you’re buying from a real estate owner or you’re purchasing a house at auction, there are several things you need to know.
A sale house in Florida is pretty common as Florida is a famous state for investors due to low taxes and constant flow of residents. If you’re thinking of buying a foreclosed home in Florida, things can get trickier. Here are a few things you should know about the process.
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A Foreclosed Home – What is it?
A foreclosure is a process where a mortgage lender recoups a portion of the delinquent mortgage payments from a homeowner who has been defaulting on the loan payments. The lender will then sell off the real estate property through a foreclosure auction. For homebuyers and real estate investors, this is certainly a great opportunity to buy a house at a low price.
Foreclosure is a Legal Process
When a bank or a mortgage lending institution has to foreclose a real estate property in Florida, it has to file a lawsuit. This is a civil proceeding filed at the court and it is almost similar to a divorce case or a case of breach of contract.
If the buyer has to receive title insurance, the case has to be dismissed. Majority of the title companies look for a dismissal with prejudice and this implies that the case can’t be refiled.
Where to Buy Foreclosed Homes?
There are three different stages of the process of foreclosure that offer purchasing opportunities for investors – pre-foreclosure, auction or REO sale.
PRE-Foreclosure
This means that the homeowner is delinquent on the mortgage payments but the lending institution hasn’t still foreclosed the house officially. This process may last from 8-14 months till the time the bank seizes the property. Pre-foreclosure buying presents a profitable opportunity to check out the property before finally buying it. In this case, you buy the house from the homeowner and not from the bank.
House Auctions
When the homeowner doesn’t short sale the property, it can be sold off in an auction. The highest bidder wins the property. If you’re a real estate investor, grabbing foreclosed properties through auctions are a great way to strike a profitable deal. Be sure about the price you can pay for the house before attending the auction. Don’t get caught up in the excitement!
Reo Sales
The last stage is to buy a foreclosed home through an REO (Real Estate Owned) sale. This is when the property doesn’t sell at an auction and is waiting for a new buyer. Such properties are available at a huge discount. However, you need to be aware before buying such a property as there is much likelihood that there is some serious problem with the property.
So, when you’re trying to buy a foreclosed property, hope for the best but be prepared for the worst.
