Tom from Spanish Fort, AL asked: “How can I buy a condo that’s a pre-foreclosure or at auction?”
Pre-foreclosure properties are generally defined as a property that has been served a notice of foreclosure, but the foreclosure sale has not yet taken place. You’ll see lots of these on Zillow. They are fool’s gold. I’ve pursued several pre-foreclosure properties, tracking down the owners and presenting offers that are win-win. I’ve never successfully acquired any of these properties. The owners are either in denial or so completely distrustful that there is no deal to be made. The denial scenario is pretty easy to spot “I’ve worked it out with the bank” – no you haven’t and it sells at auction the next week. The distrustful people feel like they’ve been screwed around so much (generally crippling medical debt that they’ve tried to pay off at the expense of their mortgage) that they don’t believe that the offer I’m making is a legitimate solution to their problem.
In my experience, the time between notice of foreclosure and the actual foreclosure sale is too late – these people are either “done” or “pissed”. The time to approach these homeowners is much earlier in the process – and I think a lot of the “we buy homes any condition for cash” guys pick these off earlier in the process. The way to find those homes is to put together a large scale marketing effort and then evaluate the properties that come in. To get back to your question, that’s not how you find a single condo in any market.
As far as buying at a trustee auction, there’s a whole lot to learn. Generally trustee sales are advertised in local newspapers (yes – in print, and sometimes online) and I’d recommend learning how those work. Attend several of the auctions so you see how they work – different trustees sometimes run the auctions a little differently and have different requirements for payment and such. Keep in mind that you’ll have to pay cash (no mortgage!) for properties purchased at a trustee sale, generally within 24 hours of the sale. You’ll also be buying a property that you know little about, likely have not inspected or even seen the inside of, likely has a strange smell and a lot of crap to get rid of (“trash out” is the industry term) and you might even have folks living in the house with no intention of leaving.
Buying at a trustee sale is not for the faint of heart!
Shameless plug: Foreclosures in Baldwin County | Urban Property