EP 35 - How to Buy a Foreclosure pt. 1 - a podcast by Brian Cook And Kindra Cox

On Episode 35 of The Brian and Kindra Show, they discussed how to buy a foreclosure.  A foreclosure is where a person who owns a piece of property with a mortgage from a lender has the property taken away from them due to lack of payment. This is similar to a car repossession. Then the lender claims the title to the house. 

Generally, in Oklahoma they do Sheriff’s Sales to sell the property. This a public auction at the courthouse by the Sheriff. This establishes the price by three appraisals and they average those appraisals, publishing the price in the newspaper. At a Sheriff’s Sale, you have to buy the property at two-thirds value. However, with Sheriff Sales, you aren’t allowed to see the property before purchasing (generally), because it is still occupied by the current owner.  The current owner will own the property until confirmation of the Sheriff's Sale, typically 30 days after. 

A lot of time buyers call looking for foreclosures thinking it will be an easy buy with easy equity. However, oftentimes they are not as easy as sometimes shown on popular TV programs. Foreclosures can be a lot of work. An owner’s care for the property may dwindle as they are being foreclosed on. Not all foreclosures are not all clean and shiny. Most have an odor issue or significant maintenance/repair issues. 

You may find some challenges accompanying your foreclosure purchase.  Because of the lack of maintenance and dealing with a foreclosure company that is a third party who has zero attachment to the property, your lender will have some specific concerns depending on the loan type. The foreclosure company isn’t necessarily going to care what the lender thinks or wants. If you decide to buy a foreclosure, it is suggested to do a full title search to make sure everything is clear and ready. Hire an attorney to pull the title and do a full search, or you can update the abstract and send it for a title opinion. When you purchase from a sheriff sale or a foreclosure, you likely will not receive a general warranty deed.  Typically the purchase is granted through a special warranty deed where they do not guarantee that the title is clear and marketable. Also with these types of sales, they do not have surveys completed. You could have issues down the road realizing the property lines aren’t what you thought.

To listen to some great stories associated with buying foreclosures, check-out Ep 35 - How to Buy a Foreclosure on YouTube! (https://nwok.forsale/Ep-35) Also, stay tuned for next week’s column where we will learn more about foreclosures and the process to purchase. Brian and Kindra hope these tips have been helpful to you. As always, if you have any questions or need help, please feel free to reach out to your local real estate professional.  

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