Buying a Foreclosure in Santa Clara, California or in any one of the many competitive bay area markets is a nightmare for anyone navigating through this unguided. We’ve all heard the story about someone who knows someone who bought that mansion in perfect shape for pennies on the dollar with the truth always being a much different story. Partnering with a property management company in Santa Clara to guide you through this process can be the difference between a first time investor being a multi-unit long term investment property owner or a once and done investor. Buying a foreclosure can be a great way to improve on an investment properties cash flow in its early stages but taking it slow and not feeling rushed will ensure you make the right business decision. The first step in buying foreclosures is educating oneself with the different aspects of foreclosure. In our upcoming blog series on foreclosures we will guide you through the general process as all banks are a bit different. We will begin with “Understanding Foreclosure Basics”. What are the basic terms that pop up during foreclosures?
Preforeclosure
A preforeclosure sale is a real estate sale where one gets to offer property for sale before the actual foreclosure action. You may choose a property management Santa Clara agency to help you handle the preforeclosure business. After a successful sale, hopefully one can use the proceeds from the sale to settle the outstanding mortgage debt. In the event that the sale fails to raise enough revenue to settle the entire debt the lender will need to approve a short sale. The difference between what one owes and the agreed short sale price would be considered income for that seller. The seller would be responsible for the taxes associated with this income.
If you’re the distressed seller of a preforeclosure this is the best stage for you to sell in. This is also referred to as a short sale. A preforeclosure sale is also less damaging to the sellers credit rating. You are able to get out of debt without impacting your credit rating. Another benefit of preforeclosure is that you may be able to sell the property for more than the remaining balance. This means you could pay off the loan and settle a few of your financial bills.
A sheriff’s auction is a sale where property is liquidated in case a borrower defaults on payment of a mortgage. This sale is different from a tax sale, the latter is used to liquidate property with tax liens against them. If one was to take a mortgage loan and default on payment, the bank or financial institution will sue them in court. If the bank has its day in court they have the right to sell your property at a foreclosure sale.
Sheriff’s Auction
Some jurisdictions refer to sheriff auctions as foreclosure sales. In regions where the sheriff’s office administers the sale it’s called a sheriff’s auction. Sheriff auctions are public auctions where the property goes to the highest bidder. There is usually a starting bid as stipulated in the law for the respective region. In most cases, property sold at a sheriff’s auction will normally go for a lower price than the real value. Buyers are required to have a certain percentage of cash available to deposit as good faith if they win the bid. Buyers also have a short window to fully purchase the property.
Repo
A repossession order also known as an order of repossession, is a formal notice given to a borrower, notifying them that the holder of the lien on a piece of property is about to seize control of the property. This order comes to play if one was to take a loan with property as collateral and then defaults on payment. A repossession order is the last ditch effort by the lender used to induce you to honor the terms of the loan and pay off your arrears. In some jurisdictions, a repossession order is not required – a single payment default gives the lender the right to seize control of the property. However in regions where repossession orders are allowed, there are certain limitation clauses. For instance, a lender cannot break into your garage to seize a vehicle that was given as collateral.
Property Force’s, Property management Santa Clara location is here to guide both buyers and sellers of distressed real estate. We help folks who own distressed real estate turn their currently owner occupied property into a rental providing the $cash$ needed to cover monthly expenses. A number of satisfied clients would tell you “Hey it wasn’t our first choice to downsize and relocate for a while but it turned out to be our best decision”. On the buyer side there are a number of foreclosures already on the market with an asset manager looking to unload it at their first opportunity. Understanding the role of the asset manager along with the documents needed to ensure a “smooth as possible process” is important so a 60 day purchase doesn’t take 120 days or possibly not happen at all.
Property Force, Incorporated is here to help you manage your Santa Clara property for rent like no other Property Management company in the San Francisco Bay Area. Call us today to get your property listed on over 25 of the top real estate rental websites along with being listed on your local Multiple Listing Service. Did you know that the bay area has over 20,000 Realtors all with individual websites connected to company websites? Call Property Force to managing your real estate investment TODAY to ensure all 20,000 Realtors and their client have access to view your rental. Contact us about property management in Santa Clara or the Bay Area.
