Real estate markets throughout the United States are reporting a higher than average amount of homes for sale on the market. Many of these homes in Minnesota and elsewhere are foreclosures. A rough economy has made it difficult for some to stay in their homes and many are waiting for banks to throw them out or turning to short sale procedures to try to move on. These types of sales can be a good deal for a savvy buyer, but they can also have many pitfalls. A real estate attorney can help a buyer navigate this process with ease.
The foreclosure process in Minnesota is typically non-judicial and takes between 60 and 90 days if the foreclosure is uncontested. The ownership of the home then reverts to the bank. If the foreclosure is done through a judicial process then the home is typically sold at auction by the local Minnesota sheriff as part of the court process. After the Sherriff’s sale, a 6 month redemption period immediately follows during which the Homeowner has the right to occupy the home. If the owner is unable to pay the amount of the Sheriff’s sale plus fees the Homeowner must vacate or face eviction. Even after a sale, the new owner may not be able to take possession of the home due to these rights. Having an attorney to assist in this process will be extremely helpful since the foreclosure process can be time-consuming and confusing.
Buy a “foreclosure” is a confusing term. There are actually three types of foreclosures that a buyer can purchase. The first is a home that is in pre-foreclosure. This is a home that has not yet been foreclosed upon but the homeowner is in default. Typically the homeowner is more than 90 days past due and the lender has filed a public notice. These notices are public records and a real estate attorney can assist clients in searching for such homes. Many times these homeowners may be looking to short-sale the home and savvy buyers can snap up a good bargain and also help the homeowner avoid the foreclosure process. However, the process can be tedious since the buyer is looking at homes that are not even on the market for sale so the homeowners may be unwilling to entertain offers. A real estate attorney can be helpful in making the initial approach to the homeowner via a letter.
Another option is to buy a home at a foreclosure auction. These are held by the local Sherriff’s offices in Minnesota. These auctions are fraught with complications, including investors who flip properties for a living and understand the market. Additionally, buyers typically have to pay all cash and you are not allowed the normal inspections. Another tricky issue can be evicting the residents who are still living in the home and may not treat the home they are being kicked out of well for the months it will take to evict them.
The final foreclosure option is buying a real estate-owned property, which is one that is typically owned by the bank or lender. These properties are foreclosed homes that are owned by banks and lenders and they are typically looking to sell quickly. The advantage of course is that the homeowners are no longer in the home but typically working with banks can be a lot of extra work. This is where a seasoned real estate attorney can come in handy to deal with the bank.