Alexandria VA Foreclosure Guide
What is a foreclosure?
Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan. It is a termination of all rights of the homeowner covered by a mortgage.
What is the cause of a foreclosure?
The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments). This may be due to several reasons; unemployment, divorce, medical challenges, terms of the loan, sick of property management, and even death.
What is the foreclosure process?
The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice, called a Notice of Default or Lis Pendens. The foreclosure process can end one of four ways:
- The borrower/owner reinstates the loan by paying off the default amount during a grace period determined by state law. This grace period is also known as pre-foreclosure.
- The borrower/owner sells the property to a third party during the pre-foreclosure period. The sale allows the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
- A third party buys the property at a public auction at the end of the pre-foreclosure period.
- The lender takes ownership of the property, usually with the intent to re-sell it on the open market. The lender can take ownership either through an agreement with the borrower/owner during pre-foreclosure or by buying back the property at the public auction. These properties are also known as bank-owned or REO properties (Real Estate Owned by the lender).
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Buying a foreclosure: What you need to know
Finding foreclosure properties
- Work with a real estate agent that is experienced with REO transactions.
- The majority, if not all, foreclosures in Northern Virginia are listed with a real estate agent.
- Make certain you have a Buyer's Agent working for you. They will look out for your best interest.
Negotiating a purchase agreement
- When you find your property of choice, your agent will work with you to determine property value.
- The Northern Virginia foreclosure market is very competitive. It is not uncommon for a property to have multiple offers submitted. In this case, the banks will ask for a 'best and final'. This means you will have one more opportunity to submit your best offer.
- If your offer is selected, there is an automated process that your real estate agent must follow....be patient. The process can take months.
- The bank's primary goal is to get the highest bottom line possible. Don't count on the bank paying any closing costs.
- Your goal as a buyer is to get the best possible price, considering location and property condition.
Have a Question or Need Assistance?
Not certain where to begin or have questions regarding the Northern Virginia real estate market? We are here to help and are always happy to answer any questions you may have about buying or selling Northern Virginia properties. Give us a call at 703.286.1333 or send us an email and we'll help you get started.
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