Understand the stages of foreclosure when you're buying foreclosed homes in North Carolina
Foreclosed homes can be a great bargain. You stand to shave thousands of dollars off the market price of quality homes by buying a foreclosure. When buying North Carolina foreclosed homes, it is useful to understand which phase of foreclosure the home is in so you know your buying options.
When a homeowner defaults on a mortgage, the lender often sends an official Notice of Default (NOD). This notice details the specific timeframe the homeowner has to make up the missing payments to avoid auction or repossession of the home. NODs must be filed at the county courthouse and printed in the local newspaper. You can find the date, time and place of the foreclosure auction in both places.
If the homeowner wants to stay in the home, he can repay the lender or seek a modification. Or the homeowner may sell to you in pre-foreclosure and use the sale profits to pay the entire mortgage. You may also be able to buy the home in a short sale. When buying North Carolina foreclosed homes, it is important to remember that short sales can be great bargains, but the lender must approve the short sale and any offers on the home. The lender, however, is not obligated to do so and can accept or refuse any offer.
If the home is not sold in pre-foreclosure, your next opportunity to buy it will be at an auction or directly from the lender. Sometimes lenders choose to forego the auction process altogether and repossess the home. And in other cases the home goes to auction, but does not bring the reserve price. When this happens, the home becomes a real estate owned (REO) property and you may buy it from the bank or lender.
When buying North Carolina foreclosed homes, you should know that REO properties are usually listed with a real estate agent and shown just like other properties on the market. Banks will sometimes do repairs on the home or may sell it in the same condition in which the defaulted homeowner left it. Most banks offer no warranty on North Carolina foreclosed homes, so get a professional inspection of the property if possible so you’ll know about needed repairs or maintenance.
The U.S. Department of Housing and Urban Development (HUD) also has hundreds of North Carolina foreclosed homes for sale on its website. You can find single-family and multi-family properties at all prices. HUD has a specific bid process that allows you to bid the first month if the home will be your residence. Investors can bid after that period. HUD rules can be a confusing. You need a HUD-approved real estate agent to place bids for you, so the agent can help you prepare an acceptable bid and bid at the right time.
You have many options when you’re buying North Carolina foreclosed homes. You may want to hire a real estate agent to help you find the ideal home or look at property listings yourself. To browse foreclosure listings for sale through various lenders and agencies, go to RealtyNow.