Rick Arbutine Discusses Foreclosures, Pre-Foreclosures, Short Sales, Bank-Owned REO properties

One man’s financial problem could be another man’s financial prosperity. For example the current housing market is witnessing an increase in the number of distressed homes for sale therefore opening up vast opportunities for the savvy buyer or investor who takes advantage of the existing market conditions. A distressed property could be the best value for home buyers like you while helping financially pressured owners become freed of the heavy burden. Let’s take a closer look at the primary types of distressed sales we are currently experiencing in the Orlando market.

What is a short sale?
A short sale is a negotiated settlement or reduced payoff of the loan or lien attached to the homeowner’s property. Lenders refer to this as a “short pay.” If the payoff is more than the borrower/seller is selling for, there are no closing costs unless the borrower/seller has cash to bring to the closing. The primary goal in a short sale situation is helping the borrower/seller negotiate a lower payoff so the sales transaction can close without the borrower/seller having to come to closing table with money they really don’t have. The short sale negotiation process can be very tedious, time consuming process. It may take several weeks or even months to get an approval of the sale.

What is a pre-foreclosure?
Pre-foreclosure is the beginning stages of the actual foreclosure process. When a homeowner fails to keep the account current and fails to make payments on the property, the lender serves the homeowner with a Notice of Default, or LisPendens. The Notice of  Default alerts the homeowner that unless a specific amount of funds are paid to the lender by a certain date, the property will be in a foreclosure mode and would be in jeopardy of being sold. During this time the homeowner has several choices; the property owner can bring the account current by providing the required funds determined by the lender, attempt to sell the property or wait until the complete the foreclosure process take place. Most homeowners want to avoid the pending foreclosure process therefore they will try to sell the home to prevent it.

What is a foreclosure? 
Foreclosure is the legal process in which a bank, lender or other secured creditor sells or repossesses a parcel of property (immovable property) after the owner has fails to comply with an agreement between the lender and borrower called a mortgage or deed of trust. Commonly the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete the lender may sell the property and keep the proceeds to pay off its mortgage including any legal costs and it is typically said that “the lender has foreclosed its mortgage or lien.”

What is a bank owned or REO property? 
REO or (Real Estate Owned) is a property that goes back to the lender or mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. After all if there was enough equity in the property to satisfy the existing loan the homeowner would have probably sold the property and paid off the bank. This is why the property ends up at a foreclosure or trustee sale. Since what is owed to the bank is almost always more that what the property is worth very few foreclosure auctions result in a successful sale. Then the property “reverts” to the bank therefore it becomes an REO or “real estate owned” property.

Distressed sales, pre-foreclosures, short sales, foreclosures, bank owned REO properties, can be one way to get a bargain price on the home you have been looking for however unless you are a full time real estate investor and are willing to invest the time and money to search for these opportunities it can be a challenging task tracking them down. You will need to scour the newspapers, legal documents, research the property and this takes time and hard work. For the average home buyer is just not realistic.

My team and I here at RE/MAX Central Realty in Lake Mary, Florida have created a system for home buyers that takes all of the hard work out of this process by us doing the due diligence and leg work for you. It is a totally free computerized, automated service which searches out and downloads the current list of financially distressed properties on a daily basis. You can receive this special list without any cost or obligation. You will then be able to gain an edge on other potential buyers of these hot properties.

This new service works as follows: Each week you will receive a free automated report that provides details of the current distressed properties in your price range and location anywhere in the Orlando/Central Florida market. There is no fee for this service and absolutely no obligation. To apply for this service or for more information call Karen Arbutine at 1-888-727-7778 or email rarbutine@remax.net.