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Buying Foreclosures

 

Anderson Real Estate Group® offers a unique perspective and approach to buying real estate.  We focus on finding Property that provides "equity" more commonly referred to as buying below market value or just plainly "getting a great deal". That means we search for propety for sale in many different catagories. As a result the client ends up with "Equity Property". This works for people with an eye for investment and those we are working with limited funds.

 

In order to do this we have a system of searching for property classified as; Foreclosure, Pre-foreclosure, REO (Bank Owned), Probate, Pre- listings and even the NW Multiple Listing Service (NWMLS). This allows our clients to successfully invest in any Real Estate climate.  Below you will find a detailed description of buying Foreclosure Properties.  But before you continue reading there are two things you must agree to.

 

  You must understand and agree that if you buy a foreclosure property you will;

  •  Pay the price you authorized us to bid at the auction.
  •  Signing the contract to finance any portion you cannot provide a cash payment for
  • Pay all fees and commissions based on the current assessed price
  • Do all of this within 24 hours of the auction (unless other arrangements have be made).

 

  You must understand and agree that there are no returns of Foreclosure property

 

FORECLOSURE                                                                                                                                                                             June 13 revised

    When a person falls 3 or more months behind in their mortgage payments, the lien holder can file a certificate of foreclosure with the courts.  A required 3 month waiting time then commences. During this time up to the final gavel at auction, the owner can stop the proceedings by paying in full the past due amount and late fees.  If the owner fails to do this, the property goes to auction.  We track these properties and the week before auction carefully analyze research and preview all properties that meet our clients’ criteria. 

  • ONLY PRE-QUALIFIED BUYERS may buy at Foreclosure;

General rule of thumb is you need to have between 25-30% of purchase price available in cash.

This money needs to be available and presented the day of the auction.

 

  • TIMELINE is crucial in the process of buying Foreclosure properties. It is also fluid as we react to the banks whimsy. Right now as of Jun 13 we are working on a very intense short timeline as the banks play games with specified bids.  They are at the last minute postponing and not sending a property to auction or they are coming out with a low bid as late as Friday morning in the hopes that investors can not react fast enough and they can write the property off  their books at a low price.  They then keep the property and hold it until they can sell it on the REO market at a profit.

So now we don’t start the process until Wednesday.

 

Wednesday; We start reviewing the coming week property list of cuts from the list.  These are properties that do not offer equity to our clients or are not within the search parameters for our active clients..

 

Thursday; we spend doing neighborhood, property and land research in order to determine if the property is indeed one that can be recommended.  This process is why it is so important to know in detail what our clients are looking for.

 

Thursday afternoon to late evening we send out market sheets for properties that have been selected from that week’s foreclosure list.  Coming soon, these properties will be available on our web site for your review.

 

Thursday evening and Friday morning YOU drive the properties. This should be done by 8-8:30am Friday. You are not required to drive the property unless you are purchasing for a primary residence. Notify us which properties you are interested in so we can order money. BUT we recommend you make time to drive the properties since there is NO RETURNS FOR AUCTION PROPERTIES.

 

Friday morning Either you may attend the auction or just be available by phone Friday from 10am to 12 noon minimum IF you wish, to listen in. But you must commit to verbal approval of the purchase in giving us your minimum bid and purchasing the property for you.  Auction is not for the faint of heart.  You are taking risks and a verbal agreement is binding.   If the bid is successful then we will need to know what name(s) should be on Title as we complete the initial paperwork right there on the courthouse steps. If you have used our “Soft Money “Lender, their name also is placed on the title for security purposes.  The soft money loan will be reviewed below.

 

Friday afternoon you will need to call and schedule a signing appointment IF you have used our “soft money” Lender. There you will be completing the loan documents.  Or you will need to bring in the remaining part of the cash to pay off our soft money lender. If you do this before 2:00 pm there will be no loan fees. Then sign loan papers at escrow in Bellevue by the following Tuesday or Wednesday.  Please notify us of any extenuating circumstances on loan signing.  

 

Commissions should be paid on Friday but will be extended for logistics reasons if need be to Monday.

 

  • “SOFT MONEY” LOAN” for those who can only come up with 31% cash on the Friday of the auction.

In order to buy at Foreclosure auction, you must pay for your purchase with cashier’s checks on the courthouse steps.  This is difficult for many people to do so we offer “Soft Money” loans where you pay 31% and the rest is paid by the “Soft Money” Lender. 

 

There are also “Hard Money” lenders but their rates are 2-4 times more expensive so we steer clear of those. 

 

 Our “Soft Money” Rates are;

2 percentage points loan fee and Prime plus 4% simple daily interest for the first 45 days.  This is will occur in un-foreseen circumstances.

3 points if the loan goes from 46 – 75 days,

4 points if the loan goes to 76-180 days. 180 days.

This loan is for a maximum of 6 months (180 days). Lender has the right to assume ownership of property with no refund of paid funds after 180 days, but…they do not want your property and this will be considered a breach of contract such that loans from this lender will not be available again. Any default of your responsibility will terminate your relationship with all companies involved and put your agent at risk of also being terminated.  Any monies paid on a defaulted loan are non-refundable.

 

 

Paula G Anderson

Anderson Real Estate Group®

Realty Executives Brio

Direct 206-910-9082

Fax 425-869-8555

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