subject: How To Search For Santa Monica Foreclosures And What To Look For [print this page] Santa Monica Foreclosures and The right way to Search for Them Tip 729
With so many homes going to foreclosure, how do you purchase one? To begin there are many Santa Monica foreclosures which are being auctioned off right as we speak so research into that.
Here are a few points to consider when buying a foreclosure:
o In virtually all of the states the only method to buy a home which has gone to foreclosure is through an auction. It is also common practice that you will not be given access to the house prior to purchase. You need to at least drive past the property you are looking at purchasing to ensure it at least looks how you imagined. You'll probably still find people living at the address right up to the auction. A recent example which you may have seen in the news was in California, where there were multiple Santa Monica foreclosures due to foreclosure, the authorities had huge problems with tenants remaining in their houses after auctions had given their property a new owner.
o Winning the auction also doesn't imply that you are guaranteed to be able to move into your new home immediately, you will usually have to agree to eviction laws prior to this. This throws open the chance that the previous occupants of the house may still be residing in the property. You might consider paying the occupants a fee to move as opposed to being dragged into what can sometimes be a lengthy legal process. At the end of the day, it will save you time and money in the long run just to pay around one thousand dollars to the occupants to avoid any problems arising. This tactic was one which those people who had Santa Monica foreclosures recently employed.
o It is also crucial that you check as to whether the house has been vacant in the winter period. You may be facing an expensive bill if there is evidence of pipe damage due to the cold weather and the lack of heating inside the building.
o The Sheriff's office will usually be able to offer you a portfolio of properties which are in the foreclosure process.
o It would advisable partnering with a REALTOR, or someone who understands the current market value of the home prior to making a bid on the home. This will enable you to know what sort of price the house will sell for.
o Another key piece of homework to carry out is to make sure that you know who the liens against the property are. (A lien is referred to as a party which has a valid interest in the house for instance a creditor.) This data is freely available through contacting the Recorder of Deeds. Every lien on any property should be found there.
o Liens are generally seen in this order of priority:
1. Federal Tax
2. State Tax
3. Local Tax
4. 1st. Mortgage recorded.(normally, this is the primary mortgage)
5. 2nd Mortgage recorded (usually some form of loan).
o Usually, when the higher ranking entity forecloses the lower ranking items are cleared unless they are TAX liens. However, this may not necessarily be the case and therefore it is worth doing your research. Below are just a few examples for you to look over. These generally use Santa Monica foreclosures as exemplars.
1. One scenario could be that the property has $200,000 in the first mortgage, $10,000 in tax liens and $50,000 in a second mortgage. The property sells for 250k. The tax lien is paid off, the first mortgage receives $195,000 (loosing $5,000) and the second mortgage and any subsequent liens would receive nothing. You'd then own the home fully and the title on the property would be wiped clean. (This is an example and is not guaranteed.) The rules and regulations regarding Santa Monica foreclosures are very harsh.
2. Another scenario could be that the house is 50k in tax liens and the government initiates the foreclosure to regain the money owned. In this example the home also has 250k in a secondary mortgage. This will clear the tax lien that initiated the foreclosure process and usually all other loans ranked lower. When this occurs, it is common for the bank which provided the credit for the first mortgage to put a bid on the home to try and secure their financial interests.
o The common procedure if you win the house at auction is to pay around 10% up front. You will then need to pay the existing amount within 31 days usually.
o Another good piece of advice which you should follow is to hire the services of an experienced attorney and perform a title search on the property.
o If you title search looks positive (you didn't miss any outstanding liens), then pay the other 90%.
o If the title search indicated that you GOOFED, then you will have to decide if it is in your best interest to complete the deal or loose your 10% deposit.
o If you are satisfied with the title search then pay the existing balance and then proceed to record the deed (your attorney will aid in this procedure).
o If the house is vacant then you will of course need access, (but usually you will not be provided with any keys). You do obviously still own the home though. (You might find that in some states there is a period of time where the existing occupants can reverse the foreclosure by settling the amount they owe This is particularly true of Santa Monica foreclosures.) You will of course have access to the house, but the risk is high.
o If the house is not vacant, you have to work with the local sheriff to evict the current tenants. Note my suggestion above.
I hope the above information has portrayed to you the various risks involved in purchasing a foreclosure. It is not nearly as easy as it sounds. There are a few alternatives.
1. Firstly you can just purchase a house through the standard set procedure. In this case banks will commonly lower their lien to avoid the potential risk of a foreclosure. This process could have prevented Santa Monica houses going up for sale.
2. Another little known way of purchasing a house is to actually contact banks and creditors and endeavor to purchase homes off them. Banks also commonly used realtors to advertise their properties that you can buy, so contracting a REALTOR will aid you in this process. Before I forget to say this, if anyone reading this article is looking for properties in California then please check out this Santa Monica foreclosures.
Foreclosures homes often allow first time buyers to get into the market. But the flip side to this is the massive risk involved. It is fully necessary that you recognise the risks involved and fully comprehend what you are getting into.
Make sure that you hire the services of a licensed REALTOR. Your sales proposal / contract, whether prepared by an attorney or REALTOR, will ensure that your property is free and clear of all liens or the closing will not occur. You've probably seen the news articles about how those purchasing Santa Monica foreclosures were hit hard financially for not carrying out proper background checks.
Good luck if you are intending to pursue this route of buying a new home. For anybody looking to buy a house in much less risky manner, call a REALTOR and let the shopping begin. Realtors have responded to the massive demand for Californai homes by finding many people Santa Monica foreclosures.
(All the info contained within this article is solely provided for your information. Local Laws and ordinances will dictate the exact foreclosure process in your area. Just make sure you check up on those laws prior to making any big decisions.) On a concluding note, if you are looking for homes in California then be sure to check out Santa Monica foreclosures.
