Questions About Purchasing a Foreclosure for My Primary Residence

[Randy Chang]

Hi Guys,

Thanks in advance for your help.  I'm thinking about buying a foreclosure property for my primary residence.  (http://www.zillow.com/homedetails/524-Golf-Glen-Dr...)

ADDRESS:

524 Golf Glen Drive

San Marcos, CA 92069.

WHAT ARE SOME THINGS I SHOULD BE AWARE OF BEFORE PROCEEDING?

[Andy Mirza]

@Randy Chang You've got to be very careful about this. I'm sure there are lots of threads on BP regarding buying at Trustee sales and I suggest that you become very familiar with the auction process specific to California.

Check with your title company to make sure that the 1st lienholder is foreclosing and that there aren't any senior liens outstanding. Get a preliminary title report, if possible. Check to see if the taxes have been paid and account for this in your maximum bid if they're delinquent.

Have you seen the house in person? Do you have any idea what the house might look like on the inside? The listing says that it's occupied. Depending on your people skills, you might want to try to contact the occupants to get a look at the inside of the home. You might get occupants that are hostile and won't talk to you or you might have renters that might be cooperative and will let you inside.

Have you determined the ARV? What percentage of ARV are you willing to purchase the house for? Your competition will consist of fix and flip investors, buy and hold investors, and owner occupants such as yourself. In general, the fix and flip guys are willing to pay less than the buy and hold investors who pay less than the owner occupants. If you are willing to pay more, you will have an advantage. Decide what your maximum purchase price is before you go to the auction and stick to it.

There are lots of things to consider but I think these are the main ones...