What is the process in buying a foreclosure, or distressed property in California?

by oliver on September 30, 2010

Question:

What is the process in buying a foreclosure, or distressed property in California?

Also can you help me understand what a tax lien property is and it’s buying process and foreclosure’s buying process, which is better?

Answer:

When a homeowner or borrower misses his mortgage payments for at least 3 consecutive months and is not able to make it current, the lender files for a notice of default. This notice informs the borrower that his property will undergo foreclosure if the payment is not made current. The borrower will be given a specified period in order to pay his debt or make his payments. The borrower may work out an agreement with his lender such as forebearance, refinancing, load modification or short sale. If the lender agrees for a short sale, then a buyer can enter the picture. In this kind of agreement, the lender agrees to sell the property in the open market at a price near the fair market value. If you give an offer to the lender and the he accepts it, well and good. But if the lender does not accept your offer, you will have to wait for the auction. If the borrower was not able to make his payments current and was not able to agree with the lender, a notice of foreclosure sale or auction will be sent. In the auction, the buyer who will give the highest bid will take over the property. If you choose to buy the home in the auction, make sure to be financially ready because there are other buyers who will compete with you. If you want to get the best price for the property, make an offer during its pre-foreclosure stage or during the short sale period.

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