Sunday, September 5, 2010

Buying a Foreclosure (foreclosed home) in Berkeley Ca.

There are basically three different ways to buy foreclosed properties in Berkeley, Oakland or really anywhere for that matter. There is the Trustee Sale.  This is the actual foreclosure sale.  It usually takes place on the courthouse steps and at this sale there is an opening bid and an auction.  These are not for the faint of heart.  Usually you are bidding against investors who do this for a living.  You are not afforded the same kind of protection that you get in a more normal sale that has an escrow process.  At the steps you bring your money and you buy as -is.  If there are clouds on the title...they are now yours. If there are problems with the foundation they are now yours.  If there are uncooperative tenants, they are now yours, etc.  Even the pros get burned from time to time. So, if you want to do this please go a few times and see how its done.  Research the property you are interested in, do a title search etc. Go prepared.

There are also preforeclosure sales.   These are typically Short Sales.  Where a homeowner is carrying a mortgage for more than the property is worth.  In order to sell the home the owner is required to pay off the mortgage at the close of escrow which means bringing in a large sum of money not covered by the sale.  So the owner needs permission from his lender to come in short.  The lender is then expected to eat the loss which in many cases is cheaper and quicker than going through the foreclosure process.  These properties are often a bargain but you pay for them in the length of time it takes to complete them.  If you are willing to wait and take the chance that the lender may not approve the sale this is a great way to buy a a home at a discount.

There are also post foreclosures.  These are known as REOs (Real Estate Owned) which refers to how banks name these products.  These are the homes that are not bought at the Trustee Sale on the courthouse steps and are now part of the bank's portfolio.  They are often but not always run down and lack curb appeal as they are usually listed as-is.  Sometimes a good cleaning and a coat of paint makes them very happy. Again these are often baragin properties.

In my practice I work with Short Sales (buyers and sellers) ( Click here to perform a short sales search)  and REO's (buyers only) (Click Here to do a search of available REOs) throughout the East Bay but primarily closer in, in communities such as Berkeley, Oakland, El Cerrito, Albany etc.  but I stay away from the courthouse steps.  If you want more information or to do a search on REO's and Short sales please chekc out my website

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