Buy that sinking house before it totally submerges into the foreclosure process! That’s our advice to home buyers looking for homes in Canton and Plymouth, Michigan.

Home buyers usually ask us to search specifically for foreclosed houses thinking this is where the best bargains are.

Savvy buyers look for houses that are in danger of foreclosure but have not gone into that process yet

Understanding the stages of the foreclosure process can help you gauge when to buy. Once foreclosed, the price you may get on a house may not be the best. The reasons are varied but usually have to do with rules and regulations concerning each stage of the foreclosure process.

You can find great deals on homes at any stage in the foreclosure process – preforeclosure, the foreclosure auction, or post-auction (from banks and investors) – but it’s often a case of the early bird getting the juiciest worm. By purchasing the property directly from the homeowner in preforeclosure, you reap several benefits, including the following:

•           A lower price, because you’re not competing against other investors in open bidding.

•           An opportunity to inspect the home, because you can make your offer conditional upon the home passing inspection. (When you buy at auction, the homeowners may not let you inside prior to the auction to inspect the home.)

•           Assurance that you are buying the home and not just a mortgage. When you bid at a foreclosure auction, you are buying a mortgage, not a home. If you bid on a second mortgage by mistake and do not also buy the first mortgage, you could lose your stake in the home and any money you paid for that mortgage. Buying directly from the homeowner assures you that you are buying the home.

•           Security that you won’t lose the home in redemption. In Michigan homeowners have the right to redeem their home (buy it back) after the sale. You could lose it to the homeowners or to another investor (working with the homeowners) even if you win the auction. If the homeowners sell to you, they have no right to redeem.

You can find homes in preforeclosure by reading the foreclosure notices every week they are published. By law, foreclosure notices must be published for a number of consecutive weeks prior to the sale in a local newspaper or county legal news publication. Check with your county’s register of deeds to find out in which publication(s) the foreclosure notices appear, and then subscribe to at least one of those publications.

To reduce the competition even more, you may want to consider learning about preforeclosures even earlier in the process – before the foreclosure notice or notice of default is published and becomes public knowledge. To obtain early notice, try the following techniques:

•           Network with attorneys who work with distressed homeowners in bankruptcy, foreclosure, divorce, and probate. These attorneys often have to help their clients liquidate assets.

•           Network with other real estate and mortgage professionals.

•           Tell everyone you know that you are an investor who purchases homes for cash. Better yet, create your own business card and give it to everyone you meet. People will know they can turn to you if they ever need to sell in a hurry.

•           Treat distressed homeowners with compassion and a sense of fairness and do a good job rehabbing the home. By treating people right and doing good work, you earn a reputation that speaks well of you. People who need to sell their home in a hurry will come to you rather than another investor who has a less stellar reputation.

•           Advertise that you buy houses for cash. You can post an ad in the local newspaper and hang fliers and signs around town (assuming this is acceptable in the area where you want to buy homes). Before you advertise, however, make sure you have the financing and resources in place to handle several properties at once.

Remember to choose your investments wisely. You won’t get every house you see, nor should you want every house you see. You can afford to be picky and patient – wait for the right opportunity to come your way. And do your homework to make sure it is the right opportunity for you.

For more information ask Ralph R. Roberts, GRI, CRS. An experienced real estate investor and consultant and the author of Foreclosure Investing For Dummies (John Wiley & Sons).

Because of our marketing and longevity in the Detroit western suburbs many homeowners contact us us for advice when they reach the early stages of foreclosure. Our goal is to help people faced with foreclosure by strategizing how to get their home sold with as little damage to their finances as possible. This usually requires a short sale or some other avenue that involves bank refinance or work out. We maintain a database of these houses and with seller permission we have sold several homes before they even reached the market. If you are interested in obtaining a list of these homes call us at 734-459-2600 and ask for the "PreForeclosed Hot List".

 When the bill collectors are calling and you begin receiving increasingly nasty letters from your creditors, the naturally human impulse is to hide in your home, bar the doors, and screen the phone calls. After all, you don’t have the money to pay your bills, so what’s the point in talking to these people?

First, realize that you have the power to make the calls and letters stop. According to the Federal Trade Commission’s Fair Debt Collection Practices Act, you can stop the harassing phone calls and letters by writing a letter to the debt collection agency asking them to stop. Once they receive the letter, they can contact you only once more to notify you that they will no longer contact you and to inform you of any actions they intend to take to collect the debt. This puts a stop only to the phone calls and letters – it doesn’t erase the debt.

Another way to put an end to the calls and letters, at least temporarily, is to file for bankruptcy. This is not to say you should file for bankruptcy, but if you have a lot of unsecured debt (such as credit card debt as opposed to a mortgage, which is secured by your home), filing for bankruptcy could be the best option. Upon filing for bankruptcy, the courts declare an automatic stay. This means that your creditors can no longer contact you regarding your debt. If they do call you, simply tell them that you filed for bankruptcy. They then have to work through the courts to collect their debt, rather than collecting directly from you.

Knowing that you have the power to make the phone calls and letters stop can give you some breathing room, but often the best option is to simply come clean with your creditors and find out from them what your options are. The longer you wait, the less time you have to negotiate a reasonable solution and payment plan.

When discussing your options with the bank’s representative, remain calm, rational, and respectful, but firm. Advocate for yourself without becoming abusive. Otherwise, the person you’re dealing with may choose not to cooperate with you. Keep detailed notes of who you talked to, when, and what was said, so you can refer back to these notes if needed.

Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).

During the last few years Noel and I have helped dozens of families through their foreclosure woes. Additionally we have closed over 50 short sale transactions. To successfully close these kind of transactions we have had to develop an expertise in dealing with banks and lending institutions.

If you are having foreclosure problems call us for free advice on how to handle your communications.

Thumbs up for all the positive things about home sales in Detroit, Michigan suburbs that are not getting reported by the media!

It is true that home sales are at an all time low here in Canton, Plymouth, Northville, Livonia and pretty much all of southeastern Michigan.  The media remind us of foreclosures, short sales, and the slowdown in home sales in general almost daily. The mantra is mind numbing, especially if you are a home buyer, seller, or in the real estate sales profession like Noel and I are.

I have always been taught to look on the positive side though and thought I would outline some of the reasons for optimism concerning the present state of affairs in the real estate market. I gathered these statistics concerning home sales in America. Remember these are for the country as a whole but we can expect to see similar results in our market. Also remember our home sale slowdown occurred a year or two prior to the rest of the country. This was due to the slowdown of the Michigan economy that the country did not experience. In fact the slowdown of home sales in the rest of the country is due mainly to the price bubble that occurred due to speculation and easy money as opposed to job losses for example.

The Reasons for Optimism:

 AND — Why an up-turn in late 2008 and early 2009 is likely and by 2010 solid:

AND — Why is now a good time for buyers to buy?

 

Noel and I and other professionals conduct monthly seminars in a series called "Negotiating The Real Estate Maze" at the Summit on the Park. Last night our second seminar "Foreclosure May Not be Your Only Option" drew an enthusiastic audience. All agreed there is a plethora of information on foreclosures out there on the web and elsewhere but very few could find sources containing specific details pertaining to foreclosure laws in Michigan.

Our presentation was in two parts. The first was from an article in "Today’s Buyer’s Rep" March 2007 issue titled "Anatomy of a Foreclosure". The second part of our presentation outlined the details of foreclosure law as it pertains to Michigan. For more on foreclosures click here.

Here are the two parts of the presentation:

Part 1) Anatomy of a Foreclosure - The process differs from state to state.

 

Part 2) Foreclosure Basics For Michigan 

1) Lien Theory vs. Title Theory

            Michigan is a lien theory state.

2) Judicial vs. Non Judicial