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RealPro Realty LLC.
Naples, Florida


Buying Foreclosure Homes
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The definition of Foreclosure.

Foreclosure is defined as : A legal process through which property, pledged as security for a debt, or deed of trust loan, is foreclosed on by the lender, because the borrower defaulted by failing to meet the repayment terms contained in the loan agreement and promissory note.


Approximate timeline of a foreclosure process?

It could take up to 12 month from the first missed mortgage payment to the public auction. This time is also what is called the redemption period, when the homeowner can repay the entire default amount and prevent foreclosure.

The foreclosure process allows a lender to recover the amount of mortgage that is owed, usually by taking ownership of the property and selling it at auction.
When the borrower defaults on the loan, the lender files a Lis Pendens (Notice of Default) which is public knowledge information. Once the process of foreclosure is started it can end in four different ways.

  1. The homeowner pays off the default amount during the pre-foreclosure period.

  2. The homeowner sells the property and pays the loan avoiding a foreclosure on their credit history.

  3. A third party purchases the property at a Public Auction at the end of Pre-Foreclosure period.

  4. The bank takes ownership of the property through short sale or public auction. At this time the property becomes a REO ( Real Estate Owned by Lender)

There are three ways that a real estate investor can benefit from one of the scenarios above:

Buy Pre-Foreclosure Properties.

This type of purchase involves approaching the homeowner and finding out if there is any equity in the home.
A homeowner might agree with this form of sale to avoid having a foreclosure on their credit score and sometimes they might even walk away with money.
This process takes a lot of research and must have the homeowner’s approval.

Buy Property at Public Auction.


At the end of the pre-foreclosure process, properties are offered at a public auction with the intention of recuperating any moneys owed to the lender as well as all expenses incurred in the process of foreclosure.
Some of the best deals are being purchased at auctions although there are some cons.

Buyers must pay in cash, the sale is non refundable and there is no much time to research the title of the property that could be clouded.

Buyers MUST research this option very seriously before committing.

Buy Bank-owned (REO)

If there is no other bidder at the public auction, the lender will become the owner. Usually the lender will clear the title of the property and perform any maintenance needed.
Bank Owned properties are becoming more widespread and dealing with the banks can be time consuming and challenging. I can expedite the process as much as possible and save you valuable time in this fast moving market.
Although you are negotiating with the bank at this stage, the process may make the deal harder to negotiate.The pre-foreclosure or public auction deals may be easier but they have other risks as stated above.

If you are new to real estate investing you must remember that real estate is not a quick money making scheme. It takes patience and research. Learn more about the foreclosure process here.

Visit for access to free REO and short sales listings in Naples, Bonita Springs, Fort Myers, Estero and Marco Island.



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