Foreclosure is every homeowner’s bad dream but it can be a home buyer’s great opportunity. This is especially true if the buyer can find such a home when it is in jeopardy but before actual foreclosure has taken effect. Lenders must publish their intentions before they foreclose. According to Simon Ahn, an Atlanta real estate lawyer, “You can normally look up notices of foreclosure in the county newspaper of the county where the property is located. This is a designated newspaper endorsed by the legal organ of the county. If a property is located in two counties, the lender must publish a notice of impending action in both county newspapers.”
To find out what the designated newspaper of your county is, call the Clerk of the Superior Court for your county. They are listed in the “blue pages” at the back of BellSouth’s White Pages.
You may make a great buy if you scour the special county newspapers for these notices and try to contact the owner before the bank takes possession of her/his property. The owner is often eager to get an offer and will snap up a low one.
After the lender has foreclosed on a home, s/he wants to sell it as soon as possible. Moreover, since a bank usually owns the property and is doing the selling, the process of getting financing may be streamlined for the buyer who can get financing from the very same people who are selling the house.
As with the house that is about to be foreclosed, getting to the already foreclosed home first is vital. If you want to get a good bargain on such a property, you need to find it and make a bid before the lender has had time to advertise to the general public. A wise buyer should aggressively search for foreclosed homes by calling and writing to banks and asking them for lists of these properties. Some online sites about foreclosed property are: http://www.ustreas.gov/auctions/customs/realprop.html
http://www.ustreas.gov/auctions/irs/real1.html
http://www.ustreas.gov/auctions.
There is a danger in buying foreclosed houses and that goes back to the question: why was this property foreclosed? Was it because the former owner simply could not make payments? If so, that is a good scenario for the new buyer. Or did the owner quit making the payments because there is something wrong with the property? This is the possibility to watch out for because it means that what looked like a great buy can turn out to be a colossal headache.
It does not necessarily mean you should not buy the residence since, after all, your standards, needs, and desires might be different from those of the owner who defaulted. It does mean you need to find out why that owner found the property wanting. Was it the location? If so, you have to discover what it was about the area that the previous resident disliked — the crime rate? traffic? lack of convenient access to — what? — and determine if you have a higher tolerance for whatever negative quality it was about the neighborhood which turned that owner off.
Has the house or surrounding area been environmentally contaminated? This can be an especially dangerous situation for, if you buy property with the knowledge that it is environmentally contaminated, the government can force you to pay for any needed cleanup. You should also consider the possibility that environmental contamination from your property might seep into the property of your neighbors — bringing both legal and civil liabilities.
Are there structural defects in the house? If so, and you are the type who likes to undertake home improvement (the practice, not the TV program), it might still be a worthwhile investment from your point of view. However, you need to have a good idea of just what those problems are before you can make an intelligent decision.
Another vexing problem can crop up between the time the place is foreclosed and the time a new buyer takes possession. During this period, the old resident has no incentive to keep up the house and property. S/he may even be in so sour a mood as to deliberately harm it. Thus, you need to have it in writing that the final purchase depends upon the home seller ensuring that the property will be in the same condition that it was in at closing when the offer was made and/or have the seller agree to reduce the price for any needed repairs caused by damage after that date.
Thus, it is advisable to get a record of what shape the property is in when you agreed to buy it, either through photographs or on videotape, so that you can seek redress if it should appreciably worsen before you move in.
Georgia has what is called “foreclosure by power of sale.” That means that a court order is not required for foreclosure. In this state, auctions are held on the first Tuesday of each month on the courthouse steps. Some states have a period in which there is a “statutory right of redemption” and the homeowner can redeem the property after it has already been foreclosed. Georgia is not one of these states. The defaulting homeowner can cure her/his default right up to the time of the auction by tendering the entire amount due plus attorney’s fees, interest, and penalties. However, once the auction takes place, the property is gone.
It is a good idea to consult a real estate attorney before putting in a bid on a foreclosed property. The laws regarding foreclosure, the rights of the foreclosed upon to redeem their property, the rights and obligations of the lenders, and the rights of new buyers can all be complex and somewhat baffling to the layperson.
