I have had several clients ask questions regarding foreclosure properties. There have not been too many on the Palos Verdes Peninsula. Foreclosures are not your normal purchase and a buyer is usually on his own (unless he hires a Realtor to act as his Buyer’s Agent to help him navigate through the process). Here is the time-line for the process. A NOD property is one that has a Notice of Default filed against it; the owner has 3 months to reinstate before the bank can foreclose. A NOT property is when the bank files a Notice of Trustee’s Sale which is the actual sale/auction on the courthouse steps. A REO property (is bank owned) has been taken back by the bank as it did not sell for the bank approved price at the foreclosure auction; usually a REO property will eventually be listed with a Realtor.
There is a new twist to the Foreclosure Sale/Auction – Duval County in Florida will be the first in the country to hold and Internet foreclosure auction next month. The LA Times Business section had an informative article regarding the pros and cons (mostly cons) of allowing these auctions to be held on the Internet. Currently, Florida is the only state that is not required to hold a public sale after notice has been given.
Buying foreclosure properties are not for the feint of heart. Currently in California on the courthouse steps, “the auctioneer announces a property and bidders shout out their bids, raising them in $100 increments. If they win, they have to pay the entire sales price, often within the next few minutes. That usually means signing over that cashier’s check and collecting any change.” Prior to the auction, “bidders have to research the properties’ histories, understand the local market and actually visit the homes” (usually just a drive by as the homes are still occupied). Allowing foreclosure auctions on the Internet could open up potential problems for buyers who are lulled into a false sense of security by the property information that is available on the Internet not realizing how much information they may be missing.
