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How do I buy a San Diego foreclosure property?

Ready to get a great deal on a San Diego foreclosure property? 

Don't know how to take advantage of the booming San Diego foreclosure property market?

Here is where you learn how to buy a San Diego foreclosure property!

If previous high prices have kept you out of the San Diego foreclosure housing market, join the smart buyers who are taking advantage of the increased number of foreclosures to buy a foreclosure home in San Diego.  The number of San Diego foreclosure homes is near an all-time high.  With the right preparation, you can take advantage of this great buying opportunity.

Foreclosure properties come in three types:

1. San Diego Pre-Foreclosure Properties
2. San Diego Foreclosure Auction Properties
3. San Diego Bank Owned or San Diego Real Estate Owned (REO) Properties

There are several advantages and disadvantages of each San Diego foreclosure property type.

San Diego Pre-Foreclosure Properties

San Diego Pre-Foreclosure properties are properties that the buyers have defaulted on their loan.  A Notice of Default is currently being executed.  (Want more information about Notice of Default and the Process for Foreclosure in California? Generally, borrowers have 90 days from the date of the Notice of Default to either bring payments up-to-date or arrange for a loan work out.  Otherwise, the property is scheduled for a Foreclosure Auction.

The advantages of purchasing a San Diego Pre-Foreclosure home are: 

1. You can generally inspect the property.
2. You have the option of obtaining financing rather than pay all cash.
3. You can obtain title insurance.
4. There is generally no eviction required.
5. The overall risk is low.

The disadvantages of buying a San Diego Pre-Foreclosure property are:

It may take some time to locate the contact information of the Seller.

1. Not all Pre-Foreclosure owners want to sell.  Thus, you may waste a lot of time trying to find a seller.
2. The seller may ask for an unreasonable price.
3. Generally, there are no real estate agents to guide you through the buying process.

Many of these San Diego pre-foreclosure homes are listed for sale on the San Diego Multiple Listing Service (MLS).  All of these properties have asking prices and have real estate agents representing the seller.  You may view the complete list of San Diego homes for sale at www.mlsofsandiego.com

San Diego Foreclosure Auction Properties 

San Diego foreclosure auction properties are generally sold at the court steps in downtown San Diego in an informal setting.  Be prepared to bring cashiers checks totaling the bid and realize that all sales are final. 

The advantages of purchasing a San Diego Foreclosure Auction home are: 

1. The amount of people bidding is limited because you need to pay cash at the auction using cashiers checks.
2. Less potential pool of qualified buyers leads to more of an inefficient marketplace. Therefore there is a potential for great price savings.
3. Some banks are now pricing their minimum bids below the amount they are owed.
4. All junior liens are wiped out by the foreclosure hence a 2^nd Trust Deed is eliminated if the 1^st Trust is foreclosing.

 

The disadvantages of buying a San Diego Foreclosure Auction property are: 

1. You cannot inspect the property prior to purchase. You are buying the property in "as is" condition.
2. You have to pay cash (cashier's checks) for the entire purchase at the auction.
3. You cannot obtain title insurance and the ownership is subject to other superior liens
4. A costly eviction may be in order which costs both time and money.
5. The overall risk is high but there is opportunity for a good deal. 

 

San Diego Bank Owned Foreclosure Property or San Diego REO Property

The advantages of purchasing a San Diego Bank Owned Foreclosure Property home are:

1. You can generally inspect the property.
2. You have the option of obtaining financing instead of paying all cash.
3. You can obtain title insurance.
4. There is generally no eviction required.
5. The Banks are very motivated to sell the property.  The lenders price San Diego foreclosed homes to sell as the lenders do not have the emotional attachment like other sellers.
6. The overall risk is low and the savings potential is high.

The disadvantages of purchasing a San Diego REO home are: 

1. The response time from Banks may be slow due to their busy volume.
2. The banks generally have more restrictive due diligence periods to inspect the property the inspection period of ten days is more likely than the customary 17 days.
3. The banks usually have their own purchase contract their contract is generally less advantageous to the buyer than the standard Realtor purchase contract.

 

A great free resource for finding Bank Owned foreclosure property currently listed for sale on the San Diego Multiple Listing Service (MLS) can be found at http://sandiego.houserebate.com/foreclosures/.    

Most other advertised foreclosure lists only show pre-foreclosure property as they do not have access to the San Diego Multiple Listing Service (MLS) and they change to access the data.  Depending on risk tolerance, buying a San Diego Foreclosure property can yield some great financial advantages.    

The information is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice.  Although the information has been compiled from sources deemed reliable, please note that individual situations can vary and therefore, please consult your attorney for specific advice and legal counsel. 

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 Brian Yui is the CEO of HouseRebate.com, which he founded in 1999, utilizing 20 years of real estate experience to create a full-service discount online/offline real estate brokerage firm. 

He's the co-author of the best-selling books; Home Buying by the Experts and Wake Up...Live the Life You Love: Purpose, Passion, and Abundance. Brian Yui (www.brianyui.com) regularly offers his expertise on the real estate industry as a media contributor. Visit www.houserebate.com/blog to get valuable information about San Diego Foreclosure properties.