Alaska Foreclosures: The Basics of Buying Foreclosures
by Dan Wolf
on Monday, December 23rd, 2013 at 12:03pm.
Buying Alaska foreclosures is not easy nor guaranteed. If you are a beginner this blog will help you conquer the complications of buying a foreclosure
We have all seen the television ads, reality shows and marketing that show rich investors making easy money by buying foreclosures.
Yes it is possible to find Alaska foreclosures at a discount but there are a number of pitfalls as well.
There are 2 common downfalls of Alaska foreclosures
1. After fixing them up the total cost could equal retail value.
2. Not understanding the foreclosure process buying a money pit
Alaska Foreclosures: The Process
All Alaska foreclosures go through a process where the bank attempts to recover the amount owed on a defaulted loan. To do this to repossess the home.
Most Alaska foreclosures begin because the home owner missed a mortgage payment. When it was missed the bank filed a notice of default. This public record is available for anyone to see.
If the home owner does not pay his or her mortgage in 90 days, the foreclosure process begins and a sales date is issued. It may take 6 or more months for the forecloser to actually take place.
If the Alaska home does not sell at the court house steps for a cash sale, then the bank purchases it, and markets the property, usually through a real estate agent.
Each state is different. It is important that you learn any laws that dictate Alaska foreclosures and understand them before you get ready to buy a home.
3 Ways to Buy Alaska Foreclosures
1. Short sale: If the value of the home is below the total balance of the mortgage then owners will try and get the lender to move forward with a short sale. Under this arrangement, if you make a fair-market offer on a home that is less than the amount owed, a bank can agree to accept this offer and forgive the remaining debt on the property, staving off a foreclosure for the owner. However, getting the bank to agree can be a lengthy and aggravating process for the seller and the buyer.
2. Auction: Another way of purchasing foreclosures is to buy them at auction on the courthouse steps. Plenty of investors do this, often because it's a way to buy an attractive property with multiple liens. This is risky! You don't get to see the inside of the house nor conduct an inspection before you buy. Plus, you may have to evict the current owner!
3. REO aka Real Estate Owned: These are the properties that went to auction but were not bid on, and so they reverted to the lender holding the mortgage. In a hot market, these properties will sell for full market value. But these days, with sales sluggish and banks holding large inventories of these REO properties, many lenders are motivated to discount the price to move the properties off their books.
Want to learn more about Alaska foreclosures? Contact us today to get a free consultation to review your options. .