Helpful Facts And Advice In Dealing In Real Estate: From Redemption To Foreclosure
When you buy property at auction in a state that has redemption laws, you get a special deed or special title. Because the owner has a number of months in which they can repay the purchase price and redeem their property, it's called a defeasible title. That is, one that can be defeated, which means that you don't have clear title yet.
Securing Redemption Rights
When purchasing redemption rights, you may be dealing with an owner who is under a great deal of stress and may not be aware of the amount of equity they have in their property. Though they may be able to get more for their redemption rights, the rule of thumb is to offer the owner $1,500. They may ask for more, but you should weigh the amount of equity involved.
Purchasing Property
The process of purchasing property usually starts with a loan. If you borrow $100,000 from a lender, that is a note. When you buy a piece of property, to make the property the collateral for that note, you get a mortgage or deed of trust. In a judicial state, it will typically be a mortgage. If the owner defaults on the note, the lender must take the owner to court to sue for payment. The mortgage attached to the note is the security instrument. If the owner does not pay, the property can be foreclosed.
Notes, deeds of trust, mortgages, real estate -an overview
In a Deed of Trust state, there are three parties involved in the foreclosure process:
Trustor: otherwise known as the Borrower
Beneficiary = Person lending the money (mortgagee)
Trustee = Party handling the transaction
In a deed of trust, the trustee handles the foreclosure for the beneficiary; in a mortgage, a lawyer handles the foreclosure for the beneficiary. A mortgage and deed of trust are two separate and different things, but perform the same function -acting as security instruments until the property and loan is completely paid off.
The two major strategies in the event of a foreclosure are:
Short Sale
Short Sale
Sometimes however, should the property and case require it, there is the "subject to" transaction which bases purchase on the existing financing of the real property. - 23159
Securing Redemption Rights
When purchasing redemption rights, you may be dealing with an owner who is under a great deal of stress and may not be aware of the amount of equity they have in their property. Though they may be able to get more for their redemption rights, the rule of thumb is to offer the owner $1,500. They may ask for more, but you should weigh the amount of equity involved.
Purchasing Property
The process of purchasing property usually starts with a loan. If you borrow $100,000 from a lender, that is a note. When you buy a piece of property, to make the property the collateral for that note, you get a mortgage or deed of trust. In a judicial state, it will typically be a mortgage. If the owner defaults on the note, the lender must take the owner to court to sue for payment. The mortgage attached to the note is the security instrument. If the owner does not pay, the property can be foreclosed.
Notes, deeds of trust, mortgages, real estate -an overview
In a Deed of Trust state, there are three parties involved in the foreclosure process:
Trustor: otherwise known as the Borrower
Beneficiary = Person lending the money (mortgagee)
Trustee = Party handling the transaction
In a deed of trust, the trustee handles the foreclosure for the beneficiary; in a mortgage, a lawyer handles the foreclosure for the beneficiary. A mortgage and deed of trust are two separate and different things, but perform the same function -acting as security instruments until the property and loan is completely paid off.
The two major strategies in the event of a foreclosure are:
Short Sale
Short Sale
Sometimes however, should the property and case require it, there is the "subject to" transaction which bases purchase on the existing financing of the real property. - 23159
About the Author:
Want to know more about real estate? Log on to Don Burnham's website http://www.weknowthewayback.com and know everything from redemptions and foreclosure all under one roof.
posted by X - Men @ 2:12 AM
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