Thinking About Buying Santa Monica Foreclosures?
Santa Monica Foreclosures - Get a good deal on Them Without Getting Taken for a Ride Recommendation 224
There are many homes which have been repossessed by creditors, usually meaning you can pick up a great deal, but how do you go about obtaining one? To begin there are many Santa Monica foreclosures which are undergoing foreclosure, so look into that.
Well, you will firstly need to take into consideration the factors listed below:
o In virtually all of the states the only way to obtain a home which has gone to foreclosure is through an auction. It's also worth bearing in mind that you are not usually given any access to the property you wish to purchase prior to the auction. You will get the address in advance and you should at least drive by. The home may be vacant or it may have its occupants living inside right up to the time of the auction. They had a problem like this in Santa Monica recently, where there were numerous Santa Monica foreclosures due to foreclosure proceedings, where after auctions tenants simply refused to move.
o Winning the auction also does not mean that you are guaranteed to be able to move into your new home immediately, you will usually have to adhere to eviction laws prior to this. Which means that even after you buy the house, the people who were foreclosed on could be living there. There is also always the chance that they could damage the property in protest at being forced to move, in this case you may be better off paying them a moving fee. At the end of the day, it will save you time and money in the long run just to pay around one thousand dollars to the occupants to avoid any problems arising. This is a tactic that those with Santa Monica foreclosures recently utilized.
o If the house is vacant, try to find out if it has sit through a winter vacant. If the property was vacant, you may have frozen pipe damage.
o The Sheriff's office will usually have the ability to offer you a portfolio of properties which are in the foreclosure process.
o It would advisable partnering with a REALTOR, or someone who understands the current market value of the home prior to making a bid on the home. This is invaluable as it will enable you to know exactly how much the price is worth at market value and how much it should sell for at auction.
o It's also wise to ensure that you are fully aware of all the liens involved with the home in question. (A lien is someone that has an interest in the property, like a bank or a tax lien may also be imposed if the person has not paid their taxes.) This info can be obtained via contacting the office of the Recorder of Deeds. Every lien on every property should be found there.
o Typically liens are in this order:
1. Federal Tax
2. State Tax
3. Local Tax
4. 1st. Mortgage recorded.(the initial mortgage arranged)
5. 2nd Mortgage recorded (commonly a home equity loan or similar).
o What commonly happens is that when the higher ranking party forecloses the lower ranked liens are wiped clean, apart from TAX liens. However, this may not necessarily be the case and therefore it is worth doing your research. Below are just a few examples for you to look over. The below statements use Santa Monica foreclosures as examples.
1. One scenario could be that the property has $200,000 in the first mortgage, $10,000 in tax liens and $50,000 in a second mortgage. The house auctions for $205,000. Well firstly the tax would be paid, then the primary mortgage and then anyone left over money would be paid to the remaining creditors. You own the home and the title is clear. (This is by no means 100% guaranteed to happen though, it depends on the rules in your state.) In the Santa Monica district the regulations regarding Santa Monica foreclosures are notoriously strict.
2. The other example I wish to explore is when a house has $50,000 in tax liens and is foreclosed by the government. The house in this example is also linked to a secondary mortgage of $250,000. This will clear the tax lien that initiated the foreclosure process and usually all other loans ranked lower. If this occurs the primary mortgage creditor will bid on the house to protect their financial interests in the property.
o It is commonplace that if you should win the property you pay around 10% up front at the auction house. You will then have a set time frame to pay the outstanding balance.
o Another good piece of advice which you should follow is to hire the services of an experienced attorney and perform a title search on the property.
o If you don't find any other liens on the property then go ahead and pay the outstanding balance.
o However, if the title search does throw up some questionnable information then you should seriously contemplate whether completing the purchase of the house is worth it.
o If all is well and you are happy to continue then pay the remaining 90% and ensure that you record the deed, (your lawyer will help you).
o If the house is vacant then you will of course need access, (but usually you will not be provided with any keys). You do own the property though. (In some states the previous owners have a period of time where they can reverse the foreclosure and pay the entire amount owed to the foreclosing entity. This is usually 30 to 90 days if it applies at all This is particularly true of Santa Monica foreclosures.) You will of course have access to the house, but the risk is high.
o If it is the case that the property is occupied then you will have to liase with the police and the courts in order to have the current occupants evicted, or you can pay them a set fee as talked about above.
I hope the above information has portrayed to you the various risks involved in purchasing a foreclosure. It is far from the simple transaction which many see it is. There are many other options you have.
1. Of course there is the standard option of just purchasing a house through the normal channels i.e. through a real estate agent. Banks will sometimes lower their lien (called a short sale) to avoid the cost of foreclosure and the risk with it. This process could have prevented Santa Monica houses going up for sale.
2. Another little-known way of investing in a house is to actually contact banks and creditors and try and purchase homes off them. Many banks use local realtors to list their property; so again, working with a REALTOR will help in this case. Just before I forget though, if anyone is looking for homes in California, check this resource out Santa Monica foreclosures.
Foreclosure houses can be good investments. But the other side to this is the massive risk involved. You have to make yourself fully conscious of the regulations and rules connected with purchasing a property like this.
Just remember to hire the services of a licensed REALTOR. Your contract, which your lawyer should prepare must ensure that the property is clear of all liens or closing will not occur. You may have seen on the news the recent cases were those buying Santa Monica foreclosures were recently caught out by not carrying out proper research.
Good luck if you are planning to pursue this route of buying a new home. For anybody looking to buy a house in much less risky manner, call a REALTOR and let the shopping begin. Real estate agents at present seem to be favouring re-directing people to Santa Monica foreclosures.
(All the info contained within this article is solely provided for your information. Every state and area will have different procedures. Make sure to consult an authority figure in this area before making the decision to purchase or similar.) Before I forget, if you are wanting to purchase in California then check out Santa Monica foreclosures.
by: TommyKesler
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