How to Buy a Bank Foreclosure in California
One of the safest places for small investors to put their money is in foreclosure properties. Investors looking to buy a bank foreclosure in California will find luxury homes and even ocean-front property on listings of available foreclosures.
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Identification
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A foreclosure is a legal process in which the bank takes possession of a property because the owner stops making payments. California is a title theory state, which means the property title remains in possession of the title company until the loan is paid in full. A bank foreclosure in California is a non-judicial foreclosure, so it does not involve the courts. Instead, the trustee (title company) effectuates the sale of the property, usually in the form of an auction.
Considerations
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According to ForeClosure.com, California has over 700 foreclosures and another 68,000 in the pre-foreclosure phase, as of August 2010. Online services like RealtyTrac.com and bankforeclosuressale.com provide lists of properties in the state in the pre-foreclosure and foreclosure phases. You can also find foreclosures and tax lien sales at publicrecords.com and onlinesearches.com, or check with your local county clerk's office. However, a risk you may face when you buy a bank foreclosure in California or anywhere else is the lack of access to the property for an inspection.
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Buying Process
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If you are working with a real estate agent, she can assist you with negotiating a purchase price, factoring in repair costs and maneuvering through the required paperwork to acquire the property. Buying a foreclosure at an auction may require purchasing the property "sight unseen," paying with cash and facing a long waiting period before taking possession. In California, a foreclosure sale must occur between 9 a.m. and 5 p.m. on any business day at the location noted in the notice of sale.
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