I have had many clients ask about foreclosures and how to puchase one.  Here is a short list of some of the answers to basic questions.

NOTICE OF DEFAULT

What does this mean? 

Owner has been sent notice of default and is given opportunity to "redeem" or make right the note. 

Can I purchase this property now?

The chance of purchasing a property in this status is generally small, since most owners do not want to lose their property.  In rare cases, when the owner knows that they will not be able to redeem their note, they might be willing to sell the property.  It is important to remain sensitive to the needs of the owner.

How can I purchase this property?

You must have your own CASH (i.e., liquidated assets) to purchase at this point since the mortgage is in default.  Lending institutions (mortgage brokers, banks etc.) will not loan funds for a purchase.

NOTICE OF TRUSTEES SALE OR AUCTION

What does this mean? 

Owner has right to redeem note up to the time of the auction or sale.  A date, time and place will be set for the sale or auction.

Can I purchase this property now?

You must attend auction and if you are "winner" of property, you must make your payment in full with immediate available funds (liquidated assets/cash).  You may be bidding against banks, developers, investors and other interested parties.

How can I purchase this property?

You must have your own CASH (i.e., liquidated assets) to purchase at this point since the mortgage is in default.  Lending institutions (mortgage brokers, banks etc.) will not loan funds for a purchase at this time.

BANK OWNED/ REAL ESTATE OWNED

What does this mean?

Bank or other party (such as Private Corporation or individual) has absorbed or purchased property.  They are the owner of property now.  You will probably pay close to tax value and up to market value.

Can I purchase this property now?

In most cases, the property can be purchased in this position or time.

How can I purchase this property?

Bank or property owner will set the terms of purchase.  This can vary from CASH ONLY to FINANCING through your own mortgage broker.  Your agent can contact the bank or owner for details.