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Foreclosures

This is a very basic and brief overview of Foreclosures sales. This page is geared toward amateur buyers who are curious about the process. It is only useful as a rough overview of the substantial risks and (possible) benefits of buying a foreclosed home.
For more information about the process in a specific county, please click here

I’ll break down the process into 2 main categories:
1) SHERIFF’S SALE ON THE COURTHOUSE STEPS
2) FORECLOSURES LISTED ON THE MLS


1) FORECLOSURE AUCTIONS (SHERIFF’S SALE) THAT TAKE PLACE ON THE COURTHOUSE STEPS

These are properties on which:
A) The court has granted the foreclosure
B) The grace period after foreclosure that the owner may have been given, has passed
C) If the mortgage had PMI (Private Mortgage Insurance), the PMI company has waived their right to buy the property

* Courthouse foreclosure auction properties have HUGE RISKS, some of which include:

A) Buyers are not allowed to view the house before they buy it, they must buy the property “as-is.” There can be major issues with the mechanical, plumbing, structure, etc
B) These properties may have still liabilities on the house. The new owner WILL be responsible for these and will not be able to sell it until they are taken care of. Some examples include, title issues/disputes, liens, and
C) These properties may have tax levies from multiple agencies, which the new owner WILL be responsible for



2) FORECLOSURES LISTED ON THE MLS

These are the properties on which:
A) The court has granted the foreclosure
B) The grace period after foreclosure that the owner may have been given, has passed
C) If the property had PMI (Private Mortgage Insurance), the PMI company has waived their right to buy the property
D) The property has been sold at the Sherriff Auction on the courthouse steps, and the bank or Mortgage Insurance company has bought it back (they have outbid any other buyers after determining that they will lose less money by buying the property back and selling it to the public)
E) The new owner (bank or PMI company) has paid off all liens and tax levies and decided to sell it as-is, through a REALTOR on the MLS In our area (Eau Claire / Chippewa Valley), foreclosures end up being no better ‘deal’ than any other property for 2 reasons:

1) They are typically in very poor condition. Simply doing the math on what you think will need to be repaired doesn’t protect you, because even the best contractors don’t know the extent of the damage until they start tearing into projects. Even some of the most experienced flippers lose money on these properties sometimes

2) There are so many flippers, landlords and bargain hunters in our area, that no matter how low a property is priced, they will compete with each other until they bid it up to the market price anyway



Some additional foreclosure notes:

The listing price on the MLS has little to with the actual market price. The banks will usually start near the dollar amount equaling the mortgage balance + legal fees + cleaning. They won’t accept offers substantially less than the listing price. Instead, they continually reduce the price until they receive an offer close to the current listing price

If you are considering buying a foreclosure at a courthouse auction, here are some tips to reduce your financial risk:
* Understand the current market in your area well
* Hire a Title Company to do a Title Search to determine if there are liens, tax levies or other problems with the property

UPCOMING EAU CLAIRE COUNTY SHERIFF SALES

UPCOMING CHIPPEWA COUNTY SHERIFF SALES

ALL OTHERS COUNTIES,CLICK HERE, THEN CLICK THE “Jump to a County” DROP DOWN MENU