Foreclosure
Bank Owned
Short Sale

Foreclosure

When an owner fails to pay the mortgage the lender will repossess the home other wise known as foreclosing on the home.  Make sure to do your research before looking into purchasing a foreclosure.  Take into consideration that the cost of a house or property will include the price of the home, tax liens, unpaid bills by the previous owner, and any renovation work.  Please see the Foreclosure process listed below:

• Foreclosure auctions start with a minimum bid that incorporates the loan balance, accrued interest, attorney’s fees and any costs associated with the foreclosure process. 
• High bidder must present a cashier’s check for the full amount of the bid
• If you are the high bidder and have a cashier’s check for the full amount then you will receive the property in “as is” condition which can include still having tenants living at the property and also there could be other liens against the property.
• If the high bid is less than what is owed to the bank the property then will be given back to the bank and it will then become a Real Estate Owned (REO) property.

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Bank Owned

Bank Owned homes are homes which the bank has acquired the title to the property and thus becomes the seller.  A REO occurs after an unsuccessful foreclosure auction.  Now that the mortgage no longer exists the bank will handle any evictions if necessary and also has the option to make any repairs.  The bank will work with the IRS to remove any tax liens.  If you are the purchaser of an REO then you will receive a title insurance policy and you will have the ability to investigate the property.
• Steps to buying a REO
• Have your Century 21 Shoreland Agent contact the listing agent and ask the following:
• Are there any inspection reports?
• What work has the bank agreed to make?
• How long does it take the bank to accept an offer?
• How does the bank expect the agent to present the offer?
• Make an offer on the property and be sure that in the offer you include any inspections that you want to have done (at buyer’s expense).  Also include any contingencies for the sale of the home.
• Banks generally will present a counter offer to you
• Many REO’s sell close to full market value.

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Short Sale

A Short Sale occurs when the seller of the property has an offer that is submitted but it does not cover the expenses to sell their home and pay off their current loan.  The seller is in a distressed situation and can ask the lender to take less than what was owed known as a “short payoff”.  Banks are not required to take the short payoff. 

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