Foreclosure - Good Deal or Lemon Peel?
Aloha from beautiful Waimea, where the winter rains have painted the pastures brilliant green, and flocks of cotton ball clouds are drifting across the saddle lands. The snow on Mauna Kea has been dazzling this year. Click on this snapshot from our lanai, for instance.
It seems hard to believe that there could be such a mundane thing as a foreclosure amid all this great beauty, and in truth they are few and far between. Still, foreclosures are on lots of minds these days as bargain hunters prowl the streets with pockets full of cash and eyes full of dreams.
Although there is a statute on the books that allows for private foreclosures, in Hawaii our foreclosures usually go through the Court system. Three big problems with judicial foreclosure are that it is so awkward, time consuming and requires so much cash in hand. For instance, if you wish to be successful at a public auction you need to come prepared to plunk down 10% of your maximum bid by way of a cashier’s check. Even if you are the successful bidder at the auction, you still don’t have any real security, because others will be allowed to surpass your bidding prior to the Court Confirmation, which may be weeks if not months down the road!
Even if you manage to maintain your lead position until you receive Court Confirmation, you will next be presented with a demand by the Court that you come up with the balance of the purchase price in, say, 30 days, because the Court wants to get rid of this problem property and get on to dealing with the next one. Can you imagine getting mortgage financing on a run-down “As-Is” property within 30 days? Sounds doubtful to me.
Still, if you are somehow able to manage all this, please be aware that you aren’t going to get a warranty deed from the Court. Without a warranty deed you may not be able to get adequate title insurance either. Yikes! It isn’t hard to see why more people don’t take advantage of foreclosure sales, is it? It isn’t very hard to see that a foreclosure property will have to sell for far less than it is likely worth to find a buyer willing to meet such difficult Court demands.
Now that you are more familiar with the realities of foreclosure you may want to consider an alternative. Why not find a property that is likely to go into foreclosure and try to make a deal on it before it does? If you are interested in this kind of thing you may be wise to call us and “talk story” about your goals. We are very good at listening.
Imua,
Bill Jardine
Filed under: Updates
[…] moxyone wrote an interesting post today onHere’s a quick excerptIt seems hard to believe that there could be such a mundane thing as a foreclosure amid all this great beauty, and in truth they are few and far between. Still, foreclosures are on lots of minds these days as bargain hunters prowl the … […]
It is really sad how far behind so many Hawaii realtors are about how many forcloses there are in Hawaii. There are not far and few between! If you doubt it check out forclosure.com or any major banks list of reos. The Countrywide reo site alone has plenty. Its urls is http://www.countrywide.com/purchase/f_reo.asp
Tyler is right … and wrong.
On the one hand we have more foreclosures now than we’d like. On the other hand, Waimea has far fewer, since so many properties have been bought by folks with the ability to ride out difficult economic times.
Realtors will not be interested in foreclosures, since there is no listing contract to assure them compensation for their work.
Imua!
Bill Jardine