Texas Foreclosures for Sale

Posted in Foreclosures For Sale, August 22nd, 2008 |

There is an art to buying Texas foreclosures for sale, before the Auction actually happens. The auction of the property is the very last step that takes place before the mortgage on the property is foreclosed upon. Individual investors are the only ones who can actually measure the risk, but it is noteworthy that reward follows risk. Some investors believe that there is not enough reward in this form of investment, perhaps purely because it does take some hard work and research. Some investors also see this as a moral issue. Are they taking advantage of a homeowner in less than prefect circumstances, or are they helping him out? It is inevitable that both the lender and the homeowner lose out in Texas foreclosures for sale. Neither party wants this to happen, but it is going to nevertheless.

Finding a homeowner and lender who are motivated to resolve the foreclosure process is key to the investor winning in a pre-foreclosure purchase. The window of opportunity for the investor opens up when the Lis Pendens is issued. This is a notice that informs everyone legal action is pending against the homeowner. The window closed on the day that the property is sold. The duration of time between these events is when the investor has to try to create a workout strategy with the homeowner in order to purchase his property before the date of the auction. The amount of time that this window of opportunity remains open varies immensely.

It is important for the investor to bear in mind that he is actually helping the homeowner out. There is a pending foreclosure on the property and this will mean fairly irreparable damage to the homeowners credit rating. In a pre-foreclosure sale the investor will rescue the loan and thereby maintain the value of the property. It could also mean a very good profit for the investor. He purchases the equity in the property by working out a strategy with the homeowner and the lender, then sells the property for a profit.

As previously stated, there is a great deal that needs to be done before any pre-foreclosure sale can take place. The investor has a whole list of items that need to be taken care of prior to being able to effect this purchase method. The basic guidelines include:

* Locating potential loans in default

* Narrowing down of the selection of properties

* Contacting the homeowner (this is probably the most difficult task)

* Inspection of the property (this can only be done by contacting the owner and receiving good co-operation)

* Determine what it I is that the homeowner requires

* Calculation of profits, what you will purchase the property for and then on-sell it for.

* Negotiations with the homeowner, the lender and in many instances lien holders.

* Close the property sale, repair it and resell as quickly as possible.