In this article let us discuss about foreclosed properties. The things we need to know about foreclosed Properties. The information we need to help us in considering foreclosed properties as a business or planning to buy a foreclosed property for your dream home.
What is foreclosed property and how is a property considered on the foreclosed side?
Here are the quoted considerations and definitions for your reference:
· When a homeowner stops paying on a loan used to purchase a home, the home is deemed to be in foreclosure. Initial stages of foreclosure, the bank or lender actively seeks to resolve the debt and return ownership of the home to the buyer.
· Foreclosure is the process of a lender seizing and selling a property to a new buyer when borrowers fail to make their mortgage payments as agreed. It enables the lender to recover at least some of the remaining mortgage balance.
· The foreclosure process derives its legal basis from a mortgage or deed of trust contract which gives the lender the right to use a property as collateral in case the borrower fails to uphold the terms of the mortgage document.
· Foreclosed homes are real estate properties whose owners failed to make the mortgage payments. So, the bank took over the property and tried to sell it to get back the investment it made.
When we are planning to buy a house and lot, condominium, or property investment in any real estate property of course we always consider and want a smooth sailing selling process. We wanted that affordable house and lot or that ready for occupancy property or that buying foreclosed properties to be in a well-ordered kind of transaction.
So here are the things we need to consider in buying foreclosed properties?
1. Research and Planning Process. An important starting point to any plan of buying properties. Make sure that you have: Well laddered Plan-Goal-Strategies that represent the you-know-how or when you are going to hold that property before you plunge into any negotiations, decisions, and execution. Property Consideration in terms of its market value, demographics, property history, and proximity, and lastly you need to objectively put into your senses that the property you want will turn over a valuable one to you and/or to the market
2. Know Where to find Foreclosed Properties. In the Philippines, the best ways to find foreclosed properties are as follows: Banks, Government Financial Institutions, Lending Institutions, and National Housing Authority, these institutions are mostly the ones that offered loans to previous property owners before foreclosure.
3. You are financially ready. Of course in any business field or I may say for a business to win a battle, having the capacity of financial capability is very crucial you are an advantage over other buyers to win or to get that foreclosed property if you are financially credible. Having that readily budget will anchor you to get the attention of the sellers, you are credible and there will be an easy negotiation on your end because it implies that you are a serious buyer.
4. Partner with respective bankers or brokers. Knowledgeable about the marketplace of foreclosed property is your in-between gateway in purchasing or eyeing a foreclosed property. This will give out the help in finding the options or alternative ways to secure that foreclosed property and this is a good negotiation venue in helping you to be provided an opportunity to understand and analyze a foreclosed property.
5. Auctions to your Options. Auctions eradicate or remove long negotiation periods and it creates a variety of alternative foreclose properties to check. It lessens and reduces the time to purchase the property and the purchasing and closing dates are known. To add there is a complete fairly competing platform for all Buyers with the same terms.
6. Property Inspection. Attentively and diligently inspect the property that you are targeting to buy to be able to see things inside the property, the location, and the proximity. This is to know what you will encounter in the future and to foresee whether it suits you, your objectives, and your goals.
7. Benchmark the same properties. This is all about knowing the market value that is similar to your target foreclosed property. A comparable basis of your target properties to other available same properties you want to acquire, the price, the selling habits, and its vicinity markets will help you further in deciding whether or not you will buy it.
8. Fees. This segment covers the following, of course your down payments, if there are necessary repairs, and budget for the fees like taxes, documents, notarial fees, and registration fees.
9. Decide well. Remember to check your list well and your considerations before buying a property it must be cost wise, sustainable and your goal market choice.
To acquire or purchase foreclosed properties we need also to remember that there are two kinds of FORECLOSURE PROCESS UNDER PHILIPPINE LAWS:
1. Under Rule 68 of the Rules of Court or Judicial Foreclosure -The first type of Real Estate Mortgage Foreclosure in the form of a lawsuit.
· Legal process is done by filing a complaint in the Regional Trial Court of the location of the mortgaged property
· If the court determines, after due notice and hearing, that the lenders are entitled to the relief sought, the court will issue a judgment ordering the borrower to pay the amount owed to the lenders.
· To avoid foreclosure the borrower has the option to pay the amount within ninety (90) days of the finality of the judgment, but not more than one hundred twenty (120) days.
· When a borrower fails to pay his or her obligation within 90 to 120 days the property covered by the Real Estate Mortgage will be sold at public auction to the highest bidder.
2. Act 3135 or extrajudicial foreclosure.
· The lender does not need to file an action in court
· He or she may simply apply with the Clerk of Court to secure the attendance of the Sheriff who will perform the public sale.
· The sale cannot take place outside of the city or province in which the property is
· The property would be sold through extrajudicial foreclosure through the Sheriff.
· The borrowers must provide written authorization; otherwise, the sale is null and
· For Additional Information Act, no 4118 is the amendment of Act 3135 and the guideline quoted as reference: “SECTION 1. Section six of Act Numbered Thirty-one hundred and thirty-five, entitled “An Act to regulate the sale of property under special powers inserted in or annexed to real-estate mortgages,” is hereby amended to read as follows:
“Section 6. In all cases in which an extrajudicial sale is made under the special power therein before referred to, the debtor, his successors in interest or any judgment creditor or judgment creditor of the said debtor, or any person having a lien on the property after the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.”
In learning about the foreclosed property the question is, is buying a foreclosed property a good option for business? Yes of course, in terms of a balanced choice of consideration, if that foreclosed property is well maintained and the location is safe and it serves good proximity then take that opportunity to buy it and grab it for your business investment. Whereas, if venturing into foreclosed properties and converting it into your dream home, by all means, please do buy from the best real estate developer to assure that the property is built in good condition.
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Written byRowena Lansang