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).
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.
Goals
- 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 purchase the property below market value, minus any estimated repair costs.
Contact David Rainey and Your At Home Team for expert advice on Alexandria foreclosures.
