The ForeClosure Process

When buying a foreclosure, you will learn that there are four purchase stages in
which you can buy a San Diego Foreclosure.

Pre-foreclosure/ Short Sale Homes

This stage is when the owners of a San Diego home are facing a financial hardship and need to sell their home but do not have a sufficient amount of equity. 

The owners have placed their pre-foreclosure home on the market and once they have located a buyer and negotiated a purchase contract, they will have to ask the bank to approve only a partial loan payoff.  At this point the bank will have to determine whether it will be better for them to foreclose on the home or to agree to less than a full payoff of the note against the property.

Notice of Default or NOD Homes

Usually after several mortgage payments have been missed, the lien holder (Bank) will start the foreclosure process and file a notice of default at the County Recorders office.  This is public information.  The property may be listed by a REALTOR ® if selling the home is going to be the best solution for the homeowner. 

If the homeowner has not placed the home on the market it may be because the hardship is only temporary, family assistance may be on its way, or a refinance may help.  In this case the San Diego NOD home can be purchased directly from the homeowner.

Trustee’s Sale

At this point the bank or lien holder is holding an auction to the highest bidder above the amount that is owed on the home and backpayments.  At the Trustee sale you must be able to pay cash for the property and it is purchased as-is with no warranty of the title or condition of the property. 

If there are no successful bidders at the Trustee sale, the bank will then be the owner of the property.  Generally when this occurs the bank will retain a San Diego Real Estate agent to liquidate the home and recover the banks assets.

Real Estate Owned, Repo/REO Home

At this stage the bank has retained a REALTOR ® to list and sell the home.  The home is listed on the San Diego MLS (multiple listing system) and can be bought with the assistance of a real estate broker.  Most types of conventional financing can be used to purchase a San Diego REO home, even 100% financing. 

A buyer of this type of home must keep in mind that while they may be able to purchase the home for a lower price, many times the bank owning the property will require the buyer to agree to remove their protective time frames early and to pay most of the transactional costs that a San Diego Home Seller would typically pay.

With these things being said there can be some phenomenal opportunities for a
San Diego Home Buyer with the right timeframes and risk thresholds.
If you think that these types of properties may be the opportunity you are looking for.

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