Understanding lender requirements and qualifications helps when buying Hawaii foreclosed homes
If you're shopping for a Hawaii home, foreclosures can be great bargains that are sold at thousands of dollars below market price. However, when buying Hawaii foreclosed homes, requirements of the lender must be taken into consideration.
Be aware that although the savings can be quite significant when it comes to foreclosed homes, there are also pitfalls to the foreclosure buying process and some drawbacks to foreclosed homes in general. It's important that you research the foreclosed property, order an inspection and examine all documents related to the property prior to closing on a foreclosure deal.
Understanding the requirements for buying Hawaii foreclosed homes at each stage in the foreclosure process can help your foreclosure sale go by more smoothly. There are essentially three stages during the foreclosure process. The first stage of the process is known as pre-foreclosure. This stage begins when the distressed homeowner who is behind on payments receives a Notice of Default (NOD) from the lender. This notice will detail the amount owed as well as when the home will be auctioned. The advantage to buying during pre-foreclosure is that you can have the home inspected prior to agreeing to buy it.
Once the pre-foreclosure period ends, the home will probably go to auction, although lenders aren't required to offer a foreclosure auction prior to taking possession of the home. When buying Hawaii foreclosed homes, requirements for the auction process usually involve having a deposit paid upfront to the lender, or presenting your deposit on the day of the sale. This is usually 10 percent of the purchase price, but may be more or less. The balance is typically due anywhere from 24 hours to 30 days after successful bid is accepted. Some foreclosure auctions will end without a buyer, however. The bank sets a reserve price for the home based on the remaining balance on the home loan. If this price isn't met, the bank will usually not sell the home.
The final stage of foreclosure is the stage during which you’ll most likely be buying Hawaii foreclosed homes. Requirements at this stage are similar to requirements on any other home sale. Homes that don't go through the auction process due to lender preference or that fail to sell at auction are put on the market as real estate owned (REO) homes. This is a confusing way to say that the bank owns the property. The advantages these properties offer over auctioned or pre-foreclosure properties are that the bank may do some repairs on the home and will likely clear up any title issues that might have been an encumbrance at an earlier stage in the foreclosure.
RealtyNow can help you find a real estate professional to assist you in buying Hawaii foreclosed homes. Requirements and qualifications for buying foreclosed Hawaii homes, financing options and other issues can all be discussed in detail with a competent realtor. Click here for foreclosed home listings and connections to agents.