Foreclosed properties that are being sold by the bank or lender are great investments. There are many ways to invest in foreclosed homes. You can buy directly from the bank, you can buy a auction, or you can buy pre-foreclosures from owners. There are deals out there, but there are also ways you can get in trouble.
- The safest way to buy a foreclosed home is to buy it after its gone through the foreclosure process. This process usually clears defects or liens on the property so that when you buy it from the bank there is less likelihood of a title defect. The banks usually promise to convey a good and marketable title to the property with the transaction. You don’t have to wait for the court to approve the sale because this was done when the bank took over control of the property from the previous owner at the foreclosure auction. The foreclosure auction is usually held by the trustee on the local courthouse steps in the Maryland county where the property is located.
- Purchase at the courthouse steps is a method that most think of when they think of a foreclosure auction. This is the closing process for the lender to try and either sell to a third party or to buy the property back. You see foreclosure is a process not a actually a home. So the lender, to finish the foreclosure process, must offer the property for sale, usually at public auction. If a third party does not buy the property then the bank buys it back. The problem with this process for you, the buyer, is as follows: it can take a court 3 months or much longer to approve the sale. The Courts are backed up. During that period the previous owner can file a claim against the bank or auction company delaying the process even further. The previous owner may still be living in the property and you may inherit the tenant.
- Buy your foreclosure from the bank or at a retail auction that the bank has ordered. This way you are buying from the bank after the title has cleared and less can go wrong for you. Plus the settlement is going to be much quicker.
To find out more about buying Maryland foreclosed property visit these resources:
RealtyTrac – has some good information on the foreclosure process.
Contact John Day if you want help or need to clarify your understanding of the process. If you want to buy a Maryland foreclosed property there is no better resource than John Day. He is a foreclosed home buying expert.