i'm confused please help!?
Mar 04, 2010 in
Questions And Answers
what is a tax lien certificate sale?what is a short sale? and what is a foreclosure?whats the difference in these 3?you see them all over e-bay i am thinking of buying not sure which to buy!!
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One comment
glenn on March 4, 2010 at 8:53 am
By far the most important thing in real estate is location. One of the most over rated things in real estate is the reason they are being sold or how they are currently owned.
A tax lein sale is normaly (but not always) a property tax lein. It can be income tax or others. You may buy one of these and have it reclaimed from you six months or a year from now after you have moved in. Find out your local laws before you get involved- a lot of times no one bids because of the problems in these- that is why some of the sales happen so "cheap".
A foreclosure starts when someone has not paid a debt they owe that is involved with a lein against the real estate. This very often is a mortgage loan. In my state the bank posts the property for foreclosure, an auction is held on the courthouse steps- 97% of the auctions involve the bank as the only bidder (because of legal reasons that encourage the bank and discourage the other bidders). Once the bank owns the property they list the real estate with an agent who puts it in the MLS and sells it as a "foreclosure".
A short sale is done before the foreclosure happens. The individual still owns the property and the mortgage company agrees to accept less than a full payoff of the mortgage loan balance and still allow the property to be sold with a cleared title. These take a very long time and the sale itself is very uncertain right up until closing. You may wait two months and then find out that you can’t buy the house after all.
None of these three allow for any repairs- none of the people involved will pay for any repairs and they often make it difficult to do inspections- but I would still spend that time and money if I were you so that you know what you are getting into.
The best thing you can do is find a local buyers agent that is knowledgeable and honest. They can help you find just the right house and they get paid out of seller funds. The right house may be a foreclsoure of some sort or a short sale or it may be it is being sold to settle an estate or divorce or because of a job relocation.
Concentrate of finding the best house for the money- don’t be sucked in by false promises.
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