How To Buy A Foreclosure
It happens daily. We will get a call regarding a home and the home buyer will ask us how they can buy a foreclosure. I have to ask, “what do you mean?” There’s many different definitions of “foreclosure” floating around out there. Especially as it relates to Georgia Real Estate.
Foreclosure – technically is the term for what happens at the court house. The home is “foreclosed.” This legal process in Georgia transfers ownership from the current owner or holder of the warranty deed to the entity that holds the security deed.
At the court house, you can bid on homes that are going through the foreclosure process. You must pay that day and with cash and it only happens the first Tuesday of the month.
But what about…
Instead of rambling on about foreclosures let’s talk about all the homes “statuses” and maybe that will shed some light on how to buyer a foreclosure or rather, how to buy the best deal in real estate.
- Corporate Owned – These are homes that have either been foreclosed on and “went back to” a corporation or homes that were bought by a corporation (duh?) usually as a part of a relocation package.
- Bank Owned – Homes that “went back” to the bank. It’s rare for a bank to buy a home, so 99% of these are homes that went through the foreclosure process.
- REO or OREO – Stands for Real Estate Owned. This is just referencing the department in which the asset (the home) is held in at the bank.
- Investor Owned – All bets are off. This home is owned by an investor and that’s all you know, at least on the initial preview.
- HUD Homes – These are homes that went through foreclosure and were formerly FHA loans.
- Fannie Mae Homes – Similar to HUD homes, these homes had fannie mae loans.
- Short Sale, Pre-Foreclosures, Potential Short Sale – These homes are all in the same basic status of “short sale” which is basically selling the home for less then the mortgage. There’s a much longer process and these homes should not be put in the same category as any other transaction.
- USDA Homes – similar to HUD and Fannie Mae Homes with the exception that homes were formerly backed by USDA loans.
- Wholesale Homes – wholesale refers to the practice of investors who buy homes at the courthouse during the foreclosure to resale with a small mark up. It’s the connotation around a small mark up that gives a home the term “wholesale” but it’s not always the case. These are often not “on the market.”
- Tax Sale | Estate Sale – often these homes are being forced to be sold to pay off a debt or due to a court order.
- Agent Owned – Only means the agent owns it.
As you can see there’s a bunch of “foreclosed” terms that could mean something else entirely. Each one of these types of homes has a specific process in which to buy them. We always ask, “Do you want to buyer a foreclosure or get the best deal?” Most people would say the best deal. So we suggest you hire the Jarvis Team to help you navigate the entire real estate market and if the best deal is a foreclosure then we’ll be ready to help you buy your foreclosure.
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