Buy Foreclosed Homes
Understanding Lis Pendens and its importance for the investors
The Lis pendens are a type of formal notice filed by the lender, as a way to start the process of foreclosure on a property. It is considered by the law, to be a pending lawsuit, but it allows the possession to stay with the homeowner. Also, the homeowner has full rights to sell the property or get it or refinanced. It is considered, to be a wonderful opportunity for people who want to buy a home as well as professional investors, looking to make some sure shot money in the real estate market.
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How does it happen?
In the states that demand a judicial action for foreclosure, this notice is filed when the foreclosure is reached on a mortgage or defaulted deed-of-trust. However in the states that do not demand any judicial foreclosure actions, a notice of default is issued.
As soon as it is filed, the property goes into the pre-foreclosure state. It continues to be in the same state, till the time it is sold in a public auction. The amount of time generally varies a lot, from one state-to-another. In some states, it takes 90 days to sell the properties, while in others it may take a full 12 months.
Why is it considered an opportunity for investors?
The window created between the issue of the notice and the actual sale is considered to be a valuable opportunity for the investors. During this period the investors can purchase the property straight from the homeowner, much before it goes on a public auction. This benefits the investors a lot.
Here is how it works. Since the home is in possession of the owner, he or she sees a chance in the investors to sell the home and get rid of the albatross around their neck. Since they are facing an adverse condition, they are usually ready to sell their home at a much lower price. This is a boon in disguise for the investors, as now they have to pay less.
The investors can then buy the house and sell it for a higher price therefore earning a lot of profit in the process.
Locating the properties with a formal notice
Nowadays, it is very easy to locate a property that has been served a Lis Pendens as there are various websites that provide ample information on such properties
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