Auction or Sheriffs Sale
The second step in the foreclosure process is the Sheriffs sale, this takes place after the notice of default has been sent to the property owner and the delinquency notice has been posted. The property is sold on the courthouse steps, the lender will issue a reserve price and if there is no higher bidder than the reserve price, the property becomes real estate owned by the bank or lender.
Many investors enjoy the thrill of bidding for property on the courthouse steps, however this can be a risky business as the property is rarely able to be fully viewed. But they do say that fortune follows risks and investing in Irvine foreclosures for sale in this way does have its benefits even though it is a gamble.
It is very difficult to say how much damage has been done to a property when the investor is not able to inspect the inside of the house. It is also probable that there are liens over the mortgage, but generally these can be gauged by conducting a title search. The most daunting aspect of buying a property at the Sheriffs sale, is the fact that you have to arrive with cash, generally 10 – 20% that has to be put down on the day of the auction. The balance of the money must be raised and handed over within a matter of days, so pre-finance is a requirement. This investment method is definitely not for the faint of heart and is generally only limited to the pro’s; although many people with no experience have come up with winners.
After the Sheriffs sale has taken place, if the owner of the home comes up with the money, they can pay this to the buyer and rights of redemption apply. The deal can fall through!
Post Foreclosure
Once the sale has taken place and the foreclosure process is completed, the property becomes owned by the bank or lender. The lender is a major lien holder and they will wipe out all minor liens, except tax liens. These the lender will pay as he does not want the IRS to take the property for a couple of thousand in back taxes. These REO’s or Irvine foreclosures for sale are sold in the same way as traditional real estate deals. They are often listed with listing services and real estate agents and the bargains are not as great, although with the slump in the market, some Irvine REO purchasers are still enjoying good discounts. Searching on the websites of large lenders and listing services will reveal REO’s and even eBay lists these.
Many investors prefer buying REO’s even though the discount margin is lower, this is because it is a far cleaner process. The title has been cleared and the tenants or owners are evicted, so those problems have already been dealt with. Irvine foreclosures for sale are also available at lender auctions. These are conducted as the banks inventories swell and they have to offload their inventory en masse.
