Four Seasons Realty: California: San Diego: Pacific Beach

Buying Foreclosures at the Auction Vs. Buying Bank Owned REO Homes for Sale.   Which is the better deal?  The answer usually lies in what is best for your situation...  Below is some information to help you determine whats right for you...

When we look at the current Real Estate environment it can be overwhelming with all the headlines in the news.  Everyone has a different opinion of where the good deals are and how to find them or where the economy or housing market is headed.

We have clients call us all the time wanting to buy foreclosures, short sales, or REO's because they think the thought of them automatically sound like a good buy!    However, is this true?   Lets first have an understanding of what they are and the differences of each.

Foreclosures and Short Sales can be great buys if you know how to find them and how the process of buying them works.

Short Sales: Are properties that are in default, meaning the current owner is at least 3 months behind on their mortgage or more.   Short sale's require the lender approve the sale if the amount the property is selling for is less than what is owed.   I recommend these to our clients when it is a property that they absolutely love and are willing to wait on.   Many times it can take 3 to 6 months to get the lender to approve a short sale, and even though its under contract between the buyer and the current seller, the lender can still say no in the end!   If its a property that the buyer isn't that crazy about, they are probably not worth the time and effort.   However, sometimes waiting and being patient, can not only get you a great deal, but a great home that you love all in one.   To learn more about short sales and to search all available short sales in Pacific Beach click here.

Foreclosures scheduled for Auction:  We actually attend the Foreclosure auctions on a weekly basis.  They are either held downtown San Diego on the courthouse steps or in El Cajon.  These properties are ones that the lender was not able to work out a viable solution for the current homeowner by either refinancing them, modifying their loan, or facilitating a short sale.   In this case, they take them to the foreclosure auction to offer them up for sale to 3rd party investors.   There can be a lot of great deals to be had at these sales if you really do your homework and are diligent in your efforts.    Some important things to note about these sales:

• You have to pay cash on the spot if you are the winning bidder (Via Certified Cashiers Check)
• You can't buy Title Insurance, which protects you against any unknown or past liens
• The properties are sold in completely "as is" condition
• Many times the properties are still occupied by the current owners or tenant and it is up to the new buyer to handle the eviction process at this point
• Many times if the property is occupied before the foreclosure auction it is impossible to inspect these properties up front

These items listed above could really come back to haunt you if you don't thoroughly do your homework, however they also many times allow for great opportunities.   To learn more about upcoming foreclosure auctions, and to track upcoming foreclosures in Pacific Beach and other San Diego County cities click here.

Bank Owned REO Homes for Sale:  This is an area in the current market place that I think can have tremendous opportunities for buyers.   These properties have gone through the foreclosure process and are now owned by the bank alone.   The banks traditionally don't like to own these homes because it ties up money that they could be using to lend.   Usually offers on bank owned homes for sale are responded to quickly and you don't have the time of waiting around for months to hear back like you do with short sales.   Here are some important bullet points about Bank Owned REO Homes for Sale:

• In most cases you can use traditional financing on these properties just like you would with buying a Resale or New Home.
• You can also inspect the property thoroughly up front and have appraisals, termite inspections, home inspections, etc, performed in advance before closing.
• You can buy title insurance.  Unlike with foreclosure auctions, Bank owned homes for sale allow you to protect yourself and buy the property with clean title.
• The last owner or tenants have already been evicted and the properties are vacant.
• The banks are motivated to sell.

I believe that in many cases bank owned REO Homes for Sale are just as good of a deal as Short Sales or Foreclosure Auctions.   It still comes back to your personal situation and your risk tolerance for what is right for you.   If you are looking at this as an investment, but its also a home that you and your family are going to live in, than I would suggest a bank owned REO home, a Resale home, or potentially even a short sale.   If you are a saavy investor, you don't plan on living in the home, and you have a higher risk tolerance, than maybe buying at the Foreclosure Auction is the solution for you.   Either way, we can help you make that decision easier for you.    To learn more about Bank Owned REO Homes for Sale and actually search available bank Owned Homes in Pacific Beach and other San Diego County Cities click here!

We have put together a fully integrated Real Estate website which will allow you to search all of these properties that we have talked about above, all in one place.   You can search properties throughout the entire San Diego County MLS, save properties, request showings, print fliers, track foreclosures, etc, all for free.   All we ask in return is the opportunitiy to be of service to you or someone you know in helping them find their next home.   Give us a call or visit us here.

We look forward to hearing from you!

Hello and Welcome to Pacific Beach California Free Foreclosure Auction Search, Bank Owned REO, Short Sales, and Homes for Sale.

November 10th, 2009

Understanding the foreclosure property auction (also known as Trustee Sale) process takes time, due diligence, and understanding.  Saavy Real Estate investors can find some of the best deals around buying at these auctions, but is it right for everyone?   We would like to help explain further about these auctions and the benefits and downsides of buying Real Estate at them.

Here are some of the latest statistics from Foreclosure Radar hot off the press for September 2009.  If you are unfamiliar with some of the following terms please read below for further explanations.

• Notice of Defaults for California rose by 1.08% to 37,417 filings.
• Notice of Trustee Sale dropped by 5.10% from August to 32,457 filings.
• A total of 13,123 foreclosures were taken to Sale at auction.
• The opening bids set by lenders were an average of 33.9 percent lower than the loan balance, with 46% of sales being discounted of 50% or more.
• Nearly 91 percent of foreclosure sales in September were for loans that were made between January 2005 and December 2007.
• In the month of June San Diego had 2,769 Notice of Default Filings, 2,520Notice of Sale filings, and 290 sales to 3rd parties.

Understanding the overall process is the key, and here is how the process goes as an overview:

Pre-Foreclosure (Also known as Notice of Default).  Pre-Foreclosure is usually when the current homeowner is 90 days past due on their Mortgage.  Under the new California Foreclosure moratorium lenders have an extra 90 days in which they are supposed to aggresively pursue loan modifications with those current home owners who qualify.  The current lender files with the County Recorders office a Notice of Default.  When this is filed, this information becomes a matter of public record.  When this notice is filed the lender usually gives the homeowner 90 days to come current on the amount they are past due.  During this period a good amount of homeowners lately have been trying to obtain new financing terms by doing a Loan Modification with their current lender or a Short Sale with a Realtor if they know they aren't going to be able to keep up the payments due to hardship.  Both of these options often times delay the foreclosure process as the bank looks to work with the current owner to see if one of these options may be a fit.  To learn more about Pre-Foreclosures in Pacific Beach and actually search all Pre-Foreclosures in Pacific Beach for free click the yellow map.

Foreclosure Sale (Also known as Notice of Trustee Sale).  The Foreclosure sale usally occurs and is scheduled roughly 90 days after the Notice of Default is issues.  Although, these days this process is delayed most of the time.  Notice of Trustee sale usally takes place on the courthouse steps in the County in which the property is located.  In this area, most auctions take place in Downtown, San Diego.  Properties are sold as is, without any warranties or guarantees, and they must be paid for on the spot with a certified cashiers check.  Many times the buyer of that foreclosure property has to end up evicting the current homeowner or tenant and this sometimes can be a process.   However, even though its a riskier process, the reward can be great.  To learn more about Foreclosure Sales In Pacific Beach and Search upcoming properties scheduled for Foreclosure click the yellow map below.

Bank Owned (REO).  Bank owned properties are the properties that have gone through the two steps above and didn't sell at the Foreclosure Sale.  In this case, the current lender has to take them back if there are no acceptable bids.  This can also be a great option for an investor because in a lot of cases, the lender does not want to own these properties.  These can be great deals for an investor, you can also research these properties in greater detail than Foreclosure Auctions, and most all of the time you can use financing and obtain a home warranty with these.  To learn more about Bank Owned REO listings in Pacific Beach and search all available inventory click the yellow map below.

Re-Sale Properties.  Many people think Re Sale properties are not a great deal with all the Foreclosure properties out there.  This is actually not true in many cases.  Re Sales have to be priced aggresively and in line with Foreclosures if they want to have a chance of selling in todays market.  In a lot of cases a buyer or investor can buy a re sale that has been taken good care of, that doesn't have much fix up to perform, and is very close in price to that of a Foreclosure that might require a lot of work.  Sometimes people think that because they are buying a Foreclosure at 20% below market value that its always a steal, however sometimes there is 20% worth of rehabilitation to get the property back to standards that actually makes it the same deal as a re-sale.   This makes Re Sales a great option as well.  To learn more about Re Sale Homes for Sale in Pacific Beach and search available inventory click the yellow map below.

We have built a fully integrated Real Estate Website that will allow you to search every aspect of what we have discussed above.  To search Pre-Foreclosure, Foreclosure Auction, Bank Owned REO, and New and ReSale Homes in Pacific Beach click here.

We also attend the Foreclosure Auctions for San Diego on a weekly basis and track virtually every Foreclosure property in San Diego County and would be happy to talk with you about your needs further. 

We Look forward to hearing from you!

The latest data and sales statistics were provided by Foreclosure Radar.