Foreclosures in Lake Tahoe have become a popular target for buyers investing in South Lake Tahoe real Estate. Foreclosure listings have become popular with buyers because they are usually priced below the current market value.
The term “Foreclosure” is actually the legal process by which the bank or lender uses to sell the property in order to satisfy the loan balance in the event of a default. In California, this process is most commonly a non-judicial foreclosure.
When a homeowner stops making mortgage payments, a Notice of Default is recorded with the County Recorder. The homeowner then has 90 days to cure the default. If the homeowner does not cure the default, a Notice of Trustees Sale is recorded. The Notice of Trustees sale states that the lender or trustee will sell the property at auction in 21 days.
The Trustee Sale Auction is held as a public auction conducted by the lenders representative. The winning bidder must pay with cash in the full amount of the bid. The lender usually bids in the amount of the balance due plus costs. If no one else bids higher than the lender, the property reverts back to the lender. Once the property reverts back to the lender it becomes an REO.
Why buy an REO?
An REO property is an investment gone bad to a lender, so REO’s represent a loss to the lender. Real Estate holding costs are expensive and will add to the lenders loss. In order to get money loosing assets off of the books, lenders will price REO’s ( foreclosure listings) to sell quickly. Most of the foreclosure listings in South Lake Tahoe are priced below the current market value. Many times the foreclosures are priced low enough to attract multiple offers.
Purchasing a foreclosure that is listed on the South Lake Tahoe MLS is similar to purchasing a property from an individual seller. Buyers can finance foreclosures just as they can finance re-sale and new homes. Buyers will also have an inspection period that ranges from 10 to 17 days to to any property inspections that may be necessary. Delinquent tax and utility liens will be cleared by the seller, and buyers are issued a clear title and title insurance.
Most foreclosures are sold in “As Is Condition” which makes a Home Inspection and a Termite Inspection very important. If problems are found in the inspections that are more costly than anticipated, the buyers can back out and the initial deposit will be refunded, less any inspection expenses. REO property owners are exempt from providing a Transfer Disclosure Statement or a Natural Hazard Disclosure. The seller is exempt from these disclosures because in most cases they have never seen the property and know little about it.
Because Bank Owned Listings in South Lake Tahoe are usually priced below the current market value, they can be a great investment opportunity. If you are interested in speaking more about foreclosures in South Lake Tahoe, please feel free to call me at (530) 416-2625!