What you Need to Know

When Buying a Foreclosure

Buying a foreclosed home offers a lot of opportunities but also raises a lot of questions.

To help you better understand foreclosures, let’s breakdown what it means when a home forecloses, the buying process, and what are the pros and cons of purchasing a foreclosed home.

Defining foreclosures

A foreclosed home is a home owned by the bank. These homes are usually the result of an unfortunate life event leading to the current homeowner not being able to make their mortgage payments.

Whenever someone has a mortgage contract, they have a lien on their property. If you stop making your mortgage payments, it allows the bank to seize control of the home. After the owner defaults their payments, the bank will possess the property and put it up for sale.

When you buy a foreclosed home, you are buying it from the bank, not a homeowner.

Real Estate Foreclosures

Defining foreclosures

Real Estate Foreclosures

A foreclosed home is a home owned by the bank. These homes are usually the result of an unfortunate life event leading to the current homeowner not being able to make their mortgage payments.

Whenever someone has a mortgage contract, they have a lien on their property. If you stop making your mortgage payments, it allows the bank to seize control of the home. After the owner defaults their payments, the bank will possess the property and put it up for sale.

When you buy a foreclosed home, you are buying it from the bank, not a homeowner.

New Homes Foreclosures

What happens next?

The foreclosure process begins when a lender takes possession of the home. The next steps are:

  • Payment default and notice of default: Once the homeowner has missed numerous payments, payment default begins. After 90 days from the missed payment, the bank will send a notice. The time from this notice to foreclosure will vary based on the contract’s details and the lender and mortgage investor’s policies. In most cases, they will allow the homeowner time to create a new payment plan with the bank.
  • Notice of trustee’s sale: The lender will then record the pending sale with the county and publish a notice in the local paper. Many people find foreclosures this way, but using a realtor is more effective.
  • Trustee’s sale: The lender will then try to sell the home at a public auction.
  • Real estate-owned: Once the property fails to sell at public auction, the bank becomes the new owner and puts the property up for sale. Hence, the time when most people purchase a foreclosed home.

What happens next?

New Homes Foreclosures

The foreclosure process begins when a lender takes possession of the home. The next steps are:

  • Payment default and notice of default: Once the homeowner has missed numerous payments, payment default begins. After 90 days from the missed payment, the bank will send a notice. The time from this notice to foreclosure will vary based on the contract’s details and the lender and mortgage investor’s policies. In most cases, they will allow the homeowner time to create a new payment plan with the bank.
  • Notice of trustee’s sale: The lender will then record the pending sale with the county and publish a notice in the local paper. Many people find foreclosures this way, but using a realtor is more effective.
  • Trustee’s sale: The lender will then try to sell the home at a public auction.
  • Real estate-owned: Once the property fails to sell at public auction, the bank becomes the new owner and puts the property up for sale. Hence, the time when most people purchase a foreclosed home.

The buying process

Foreclosure Homes

Pros of buying a foreclosure

One of the most noticeable benefits of buying a foreclosure is a cheaper price. The reason for this is that lenders are looking to get rid of the home quickly to get their money back.

Another benefit is there are not as many title concerns. When you purchase a home from a homeowner you are less likely to get a clean title (legal right to a house). The homeowner may have unpaid real estate taxes on their title causing the deal to be cancelled. When you purchase a home from the bank there are fewer obstacles like title concerns that will hinder closing the deal.

Lastly, buying a foreclosure still allows you some loan options. Although the buying process may be slightly different you can still get a conventional loan or a government-backed loan.

Pros of buying a foreclosure

Foreclosure Homes

One of the most noticeable benefits of buying a foreclosure is a cheaper price. The reason for this is that lenders are looking to get rid of the home quickly to get their money back.

Another benefit is there are not as many title concerns. When you purchase a home from a homeowner you are less likely to get a clean title (legal right to a house). The homeowner may have unpaid real estate taxes on their title causing the deal to be cancelled. When you purchase a home from the bank there are fewer obstacles like title concerns that will hinder closing the deal.

Lastly, buying a foreclosure still allows you some loan options. Although the buying process may be slightly different you can still get a conventional loan or a government-backed loan.

Cons of buying a foreclosure

This process is riskier than buying from a homeowner and that is why having the right real estate agent to navigate these deals is necessary.

These properties can have more maintenance concerns because the homeowners have no incentive to repair damages when they are losing their property. At the end of the day, you will be left with the responsibility of fixing the problems.

The banks are looking to earn their money back quickly so they rarely agree to repair damages. Finding the right home at the right price is important and a lot of people spend a significant amount of cash to repair foreclosed homes after purchasing them.

Although a home may be labeled as “in foreclosure” it does not mean it is ready to purchase. There is a period of redemption where homeowners have the opportunity to catch up on their payments and retain their property. Or if the property is left unoccupied for a long time there may be squatters. Evicting squatters after purchasing a home can take years and a lot of money in legal fees.

Luxury Homes Foreclosures

Cons of buying a foreclosure

Luxury Homes Foreclosures

This process is riskier than buying from a homeowner and that is why having the right real estate agent to navigate these deals is necessary.

These properties can have more maintenance concerns because the homeowners have no incentive to repair damages when they are losing their property. At the end of the day, you will be left with the responsibility of fixing the problems.

The banks are looking to earn their money back quickly so they rarely agree to repair damages. Finding the right home at the right price is important and a lot of people spend a significant amount of cash to repair foreclosed homes after purchasing them.

Although a home may be labeled as “in foreclosure” it does not mean it is ready to purchase. There is a period of redemption where homeowners have the opportunity to catch up on their payments and retain their property. Or if the property is left unoccupied for a long time there may be squatters. Evicting squatters after purchasing a home can take years and a lot of money in legal fees.

Realtor Foreclosures

Is a foreclosure right for you?

Although buying a foreclosure may afford you a better deal, I can not stress enough the importance of finding the right real estate agent. The potential of buying a home with substantial damage or structural issues is greater if you work with someone who does not have the necessary experience or knowledge. I will guide you through the process and help you find the home of your dreams for the right price. Together we will navigate the search, get the proper appraisals and inspections, and lastly make an offer that fits your financial needs.

Let’s get started on this journey and find your diamond in the rough.

Is a foreclosure right for you?

Realtor Foreclosures

Although buying a foreclosure may afford you a better deal, I can not stress enough the importance of finding the right real estate agent. The potential of buying a home with substantial damage or structural issues is greater if you work with someone who does not have the necessary experience or knowledge. I will guide you through the process and help you find the home of your dreams for the right price. Together we will navigate the search, get the proper appraisals and inspections, and lastly make an offer that fits your financial needs.

Let’s get started on this journey and find your diamond in the rough.

Testimonials

What our Clients Say About us

Foreclosure Homes Silverlake
I believe that Ken was very professional and aggressive when it came to negotiating the deal. I have used Ken many times with the purchases or sale of my homes Ken is great at following through with every detail of the transaction. I highly refer him to anyone that wants a good realtor.
by Dan Maravilla
Condos Brentwood
Dear Ken, Chris, Peggy & Crew You are so thoughtful and kind. We are thrilled to be moving into our new home…something we didn’t see happening for quite some time. Thank you so much for jumping through hoops for us! We will be forever grateful!
by Kelly & Joseph Konopelski
Real Estate Santa Monica
We recommend Ken as he was very professional in dealing with the sale of my home that was listed with him. We were very pleased with the transaction of buying my new home with. We think the service he gave my wife and I was perfect. We would recommend him highly.
by Trenton Harrloe
Ranch and Farm Properties Westlake Village Hills
Working with Ken was extremely easy and he was very approachable when any questions or concerns were raised. He is very professional and does not waste time. When my husband and I would meet with him he would always make sure to go through all of the paperwork with us in a timely fashion (which can be tough when signing a thousand different documents). We really enjoyed working with Ken and could tell he was a very trustworthy individual.
by Claire Hastings
Condos Westlake Village Hills
For us Ken Grech is one of the best all around. He is honest, trustworthy, and very knowledgeable with property. I would never buy from any other person ever! This is our second time around with Ken and hopefully he will be their for our 3rd. Everyone knows it's always stressful selling / buying property, but with someone like Ken Grech on your side it becomes a great experience. It becomes easy when you have someone looking out for your best interest. We appreciated everything you did for us Ken.
by Alaysia Jennings
Condos Woodland Hills
Ken is an excellent realtor. He did an incredible job selling our house in 3 days during a pandemic. His attention to detail and his outstanding communication skills put him at the top. We were so impressed with his hard work and dedication that we are recommending him to all of our famjly and friends. It was a pleasure working with him. He knew we were nervous about leaving our home of 24 years and moving to a new state so he helped facilitate connecting us to a great realtor in the state we were moving to. He also researched nice areas in the new state to recommend to us. He helped us from start to finish. All of his help and guidance made the transition so easy. Working with Ken was a pleasure. He was there for us from the begining til the end. He met all of our expectations and guided us through the whole process with his expertise. It was a smooth and stress free transition because of Ken.
by Kylie Underwood
TownHomes Ventura Hills
Ken acted in a professional manner. I was very impressed with his knowledge of real estate, He read the sales data of surrounding homes perfectly, leading to my home to be sold on its first showing for higher than its listing price.
by Teresa Richard
Golf Course Homes Ventura Hills
Ken was on top of the deal all the way through. If you want an local area expert in real estate we highly recommend working with Ken. This was a very easy sell/buy experience and we are more than pleased with Ken's performance. Had it not been for his local knowledge, we likely would not have been able to purchase the beautiful Morrison Highland Estates house that we did. Ken is a true professional.
by Simon Barrett
Ranch and Farm Properties Valencia
Ken Grech did a wonderful job of making us feel we were in good hands with his leadership. I would definitely use his expertise in any further real estate transaction.
by Lauren Bradley
TownHomes Thousand Oaks
We met Ken at an open house and he seemed kind and knowledgeable. Ken was very valuable in the selection of a great neighborhood for our daughter to grow up in. All communications and documentation was very timely. Ken handled any problems that came up during the escrow period. Ken is very polite and cares for his clients and their future home. Ken made the whole process easy.
by Quincy Sampson
Rodeo Real Estate Agent
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Kenneth Grech

Real Estate Agent

Simi Valley | California

1308 Madera Rd Suite 8,
Simi Valley, CA, 93065
DRE#01328727

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