Residential Real Estate Services, REO Asset Management and Sales

The Courthouse Steps

The moratoriums are over. Bank inventory of defaulted mortgages have risen to their highest point ever....and there will be more to come in the next 18-24 months. While the banks are taking back most of these homes at the auction, there will be many offered at a discount to the public to avoid taking possession. You never know which ones will be discounted, so you will have to pay attention to the details of the loan, who the lender is (if that can be determined) and what are the market conditions surrounding the subject properties.

There are potential pitfalls to purchasing a property at the courthouse and one should have as much specific knowledge of the property and understand the terms of sale.  They can vary for every property, and vary between the different auctioneer Trustees. The biggest hurdle can be acquiring the title to the property in a timely manner.  In most cases, you will pay carrying charges until settlement. It is best to coordinate a settlement attorney right away, with experience in expediting settlements on Trustee sales.

Generally, you will not be able to inspect the properties in advance of the sale, so budget for repairs. Purchasing courthouse foreclosures is usually not for beginners, requires patience and a lot of research.  For most buyers and investors, waiting for the property to return to the open market as an REO (bank owned listing), makes more sense and often reduces out of pocket expenses.