What is the process in buying a foreclosure, or distressed property in California?

Question

Also can you help me understand what a tax lien property is and it's buying process and foreclosure's buying process, which is better?

Answer 1

High level version of the cycle.

1. People become behind in their bills.
2. At some point the lender decides that it is time to file a formal notice of default. They publicly declare that they are going to take action to seize the house (starting foreclosure).
3. Up until some point before the auction the borrower has the option of catching up and stopping the foreclosure action.
4. An auction is held and anyone can bid. The borrower/owner looses the property to the winning bidder. That bidder might be the lender as they enter the first bid.
5. If the lender is not outbid and 'wins' they get the property. They will then proceed to list it with an agent or otherwise work to get it sold off.

You can buy from the borrower in default before the auction. You might even try a short sale where the lender agrees to take less than they are owed.

You can bid at the auction. You need to have ready to hand over the winning amount right then and there if you win. No time to line up a loan secured by the property.

You can buy from the bank after the auction if the bank ends up with the property.

For trust deed sales in CA there is no right of redemption after an auction.

As to your other question about tax liens. You are bidding on a lien held by the county. It is not the same as bidding on the property. You buy the lien and get to collect from the county when the person pays the taxes owed. You earn a rate of return. If they do not pay then you an trigger the next step to force payment.

It is rare for a tax lien to convert into title to the property if the property has a house on it and there are no defects that makes the property worthless. Someone will step forward (the owner or the lender) to pay off the tax lien first.

Answer 2

If you want to make More $$...you should start changing your focus to Pre-foreclosures.

By buying tax liens and already foreclosed properties...you Have To come up with the funding to pay off the debt. Who the hell wants to do that:) If you do have money to be forking out, then you are going to want to get your properties Pre-foreclosure as you can perform a short sale on the property and get the lender to discount the mortgage before you cash them out. When you get the deed on a pre-foreclosure property...you hold the cards. When the bank owns the property...they are less likely to discount as much as you would get performing a short sale on the property.

Short Sales = Big Fat Checks!

If you need help with buying, selling or performing short sales, just visit:
http://scbuyshouses.com/Forms/customform.cfm?formid=65431

Answer 3

It relies upon on what you're procuring it for. while you're procuring it for your self then your score could be everywhere from 570 and up finding on your earnings and the loan information. do no longer forget that even regardless of the indisputable fact that there remains a wish for the "sub-best" borrower, the fees of pastime are no longer getting any decrease so merely be sure you're raising your score while you're searching for on your residences. If that's an investment sources, that's going to be puzzling (no longer impossible) to acquire an investors loan with a score of decrease than 680. Now, there is yet another financing determination that's obtainable to you yet i do no longer alwasy recommend. you may aquire a "difficult money" loan that money as much as 70% of the loan to correctly worth. occasion: if the valuables is properly worth a hundred and fifty after maintenance are achieved, you would be funded no greater effective than a hundred and five. so which you may actual could desire to purchase the valuables for a plenty decrease quantity in case you intend to do any maintenance on the valuables. additionally, merely be sure you may the two sell the abode or refi the abode interior of 6 months (thats while the loan comes due) or the fees of pastime bypass from 10% to fifteen% genuine speedy.

Answer 4

you get the date of the forclosure auction in the county of california ur in, then go to the auction and buy the house you want. but other people may bid the price higher. so know how much yuo want to buy it for. but you have to have the money available when ur there. or have it payed in 15 days.
call the county office your in and youll get the date and time of the sale.