How do banks sell foreclosed property?
Wednesday, July 20th, 2011 at
4:00 pm
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Tagged with: Banks • Foreclosed • property • sell
Filed under: House Sale
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There are a few ways. Listing with a green agent is common, and auctions. They also just hold onto them if they are really upside down.
Most mortgages are guaranteed in one way or another so the bank is not stuck with it. If the mortgage was guaranteed by HUD, the house will be listed on the HUD website at http://www.hud.gov There are other agencies that guarantee mortgages including Freddie Mac and Fannie Mae. There are also private corporations that guarantee mortgages. Some of these require the bank to market the property when it is foreclosed so the bank will have real estate owned (REO). Many banks list these properties on their websites (see http://www.indymacbank.com for one of the largest).
Typically they auction the properties off.
If you’re talking about property that they have already foreclosed, and the bank holds title in their own name, each bank can have their own procedures for disposal.
The ones I am familiar with in this area tend to list them with one or two realtors, and often the realtors are involved in the decision of what the price will be, depending on how quickly the bank wants to move it.
If you’re talking about how the foreclosure sale that terminates the interest of the (former) homeowner, that’s a different matter altogether, and it controlled by state laws. Generally, once it is decided that the home will be sold as part of the foreclosure, there is a process to give notice to anyone who might want to bid by advertising it in the newspaper and placing a sign in the yard which the occupants generally take down. The sale itself will occur in a specific place, which is on the premises in my area, but may be the court house in other places. Usually the foreclosing bank will bid an amount necessary to clear their loan and costs of the suit as an opening bid, and after that, it’s whatever the market will pay.
If bidding at a foreclosure auction is of interest, you need to know what the requirements are to be a recognized bidder, there will probably be an amount that you have to have in certified funds available to be eligible, and you need to know how many days you have to produce the balance of the price, which will probably not be long enough if you don’t know where you will borrow the money. This time limit is non-negotiable.
The mortgage company bought back the house i live in at the county auction, because the previous owners did not pay the taxes.
The house is in Michigan, the bank in Colorado. They hired a local real estate company to try to fix the place up, but they didnt really do anything, so they hired another real estate company, and sold it AS-IS.
My place was full of pet doo doo and urine, and it STUNK!!!!
It needed lots of updates, and the smells eradicated…aafter about 18 months, the house is beautiful.
If you buy a place that needs work, my suggestion would be to live somehwere else for the first month or two, and then you can tear the place down all at once, quickly.
Since I lived here, i had to do room by room, and i had the bed in the “living” room, had to deal with sawdust in the bed, etc.