Purchasing Foreclosure Property

By Sheryl Landrum
Mortgage Credit Problems Columnist

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Buying a foreclosure property may be the cheapest way to buy a home, but it is rarely the easiest. Bank foreclosures often show the distress of previous owners and are in need of some TLC to restore their original promise. They are not generally quick sales either, as banks are known for their slow responses and do not usually negotiate with buyers of foreclosure homes either.

That said if you think a bank foreclosure is right for you, start checking the Notice of Defaults -- the guide to homes in danger of foreclosure -- in your area.

What is a Notice of Default and how does it apply to home foreclosure sales?

A Notice of Default (NOD) is a pre-foreclosure filing and a public record. If you are working with lenders or real estate agents they can access this information easily. Also, check your county recorder's office; these days the information is often available online.

Information on the NOD includes:
  • Property address, legal description, and APR number for the home in default
  • Number of bedrooms and bathrooms
  • Existing loan amount, delinquent amount, and date mortgage became delinquent
  • Often square footage and lot size
  • Amenities such as a pool
  • Property zoning

If you find a pre-foreclosure property, talk to your real estate agent.

Your real estate agent may be able to initiate an offer to the delinquent owner before the bank forecloses. This can save valuable time for both buyers and sellers.

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