OC Staging: A Lesson in the Foreclosure Process

Posted on March 11, 2011. Filed under: First Time Buyer help |

Hello again from Real Estate Investor School. Another day another topic. What did we learn about today? Trustee sales, or auctions. This is where the houses that were foreclosed go to be sold. Feel a little lost? Don’t worry, many people don’t really understand how it works. For the purposes of this article I will use CA, a Deed of Trust State. This will be high level because the details could fill about 365 blogs. Let’s start from the beginning.

How does the foreclosure process work?

When you have financial problems you may miss some house payments. When your loan becomes delinquent the bank files a Notice of Default. This is the time when your house can be put on the market for Short Sale. This time period is called the “Pre-foreclosure” period. It can last anywhere between 90 days and 2 years these days. At the end of this period your house will go to auction. Here the bank will try to sell it to the highest bidder in hopes of recovering their money. Up until about 5 days before the auction you may be able to delay the auction and try to pull off a short sale.

What happens at an Orange County home auction?

Now the house is at Auction. It is still held by the bank, but technically owned by the homeowner who defaulted. All the investors and interested parties clamber into the auction house or courthouse and bid on all the properties out that day. This in itself is a very interesting process and is where you can find great deals on properties. The catch is that you have to come in with some money up front, and be able to pay the rest within 24 – 48 hours. If the house does not sell at auction, we move to the REO arena.

What is an REO?

What exactly is an REO, and why don’t the letters relate to “Bank owned” at all you ask? Great question. REO stands for Real Estate Owned. You see, the bank is not allowed to own Real Estate by law. After the auction, if the house does not sell, its ownership reverts to itself. That’s right, the house owns itself. It is only managed by the bank. Now the house sits on the market until someone is willing to buy it at the listed price, or make an offer the bank will accept.

You may be asking at this point why a Home Stager is writing about Real Estate Investing and attending Investing School. On top of being a Home Stager, I am also an Investor and help homeowners who are in trouble. I find win-win-win (Homeowner – Bank – Me) solutions. My goal is to get the homeowners out before they get to the foreclosure point and possibly keep their credit completely clean. This week I am brushing up on some skills so that I have as many tools as possible to serve my clients.

If you have interest in home staging or my investing adventures, contact me, Keren Shamay, on LinkedIn!

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    Orange County, CA Real Estate for hip first-time buyers and investors. Plus, fun things to know and do in OC.

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