Do You Want to Buy Foreclosed Homes?

After 3 months of mortgage non-payment, the owner is in default of their home loan.  The trustee or beneficiary will file a notice of default and trustee’s sale at the Butte County recorder’s office which will be published in the local newspaper 3 consecutive weeks.  This notice will explain the details of the public auction. This also notifies the owner what they can do to remedy the problem. If the owner does not submit back mortgage payments and fees, the property will be sold to the highest bidder on the courthouse steps.  If no one bids on the home enough to cover expenses, the bank or lender forecloses.

The foreclosed property is now called an REO, or Real Estate Owned by the bank. And banks don’t want to own real estate. Now that the property has been foreclosed upon, the bank will list the property with a local California Chico realtor.

How to Buy Foreclosures -
Tips on Foreclosed Property

When considering buying foreclosed real estate property in Butte County, it is even more important to be aware and careful of the details than when purchasing other real estate.

If the property is listed in the Chico MLS, you would purchase the home through a Chico, California realtor. It will be listed at market value and you will not be responsible for the back taxes of the previous owner. All offers are subject to the lender’s approval and agreement. In most cases, the property will be sold without any property condition disclosures and the bank will make no repairs. This is where you will be able to save money if you are able to make repairs and cosmetic upgrades on your own.  The bank usually lists the property at a reduced price to reflect the fact that they want nothing to do with making repairs themselves.  In other words, it will be an “as is” sell.

If you call me, I will identify all those Chico, California MLS foreclosed homes that can turn into great Chico real estate investments. In addition, interest rates are excellent and the California real estate market is especially good for first time home buyers. Call me.

Public Auction Sale-Foreclosed Properties Chico, Butte County

 If the home is sold on the courthouse steps, the sale will be made without any promises of the condition of the property or without any promises of a clear title.  The sale will be made without any warranty of the heating and air system, the septic, termite and pest report, the roof, or the chimney.  These are usually very expensive items to repair.  In addition, the sale will be made without guarantee of existing encumbrances such as liens, easements, etc. Remember, you will be responsible to pay the back taxes if any, and often there are several years of back taxes to be paid. If you’re okay with all of that, what should you do next?

First, look up the property tax records in the local tax office. Next, go to Bidwell Title, Mid Valley Title or Fidelity Title in Chico, California.  For $100-$300 they will search the title history for you.  You want a clear title, not a mess on your hands.

 If the property looks good, show up at the Butte County Courthouse steps with your checkbook.  You must have enough cash in the bank to cover the entire purchase. The entire purchase price includes the remaining balance left on the mortgage with interest, fees and expenses of the trustee. That doesn’t mean the bank will get that price.  It will be sold to the highest bidder.

 Don’t get caught up in a bidding war, it’s not worth it.  Know the value of the house before you bid.  If you were the highest bidder, could you turn around and sell the home for that price or more? Call me, I’ll tell you what it’s worth before you bid.

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