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Buying Atlanta Foreclosures: A guide to understanding the foreclosure process in Georgia

What are pre-foreclosures or pending foreclosures?

• Properties that are currently in default and are being advertised for foreclosure sale by the lender.
• Many of these properties will be sold at auction or foreclosed on by the lender.

How does a property get to this stage?

• Georgia is a non-judicial foreclosure state. Lenders are not required to obtain a judgment in order to foreclose.
• If the borrower fails to pay, the lender may declare the Security Deed in default.
• To enforce default in Georgia the lender must make written demand to the borrower and may accelerate the debt.
• After the lender has declared default they must follow the statutory notice and offer the sale of the property to the public.

Why should I search these listings?

• Owners facing foreclosure are often eager to sell their property.
• The listings represent opportunities for home buyers, realtors, and investors.
• Homeowners may find it beneficial to know whether the value of the homes in their neighborhoods have been affected by foreclosures.

Can I get a bargain by buying one of these properties?

• Homebuyers that are looking for a bargain may find one among pending foreclosures.
• Often owners are looking for a solution that may include selling prior to foreclosure.

Is this a good time to buy these properties?

• The recent growth in foreclosures has increased the number of opportunities available to homebuyers, investors, and other real estate professionals.
• Lenders have become more agreeable to discounting the loan amount and/or allowing a qualified contract to stop the foreclosure sale.

How is buying a pending foreclosure different than buying a regular home for sale?

• Besides the constraint of time, buying a pre-foreclosure is no different than any other real estate transaction.
• The owners of these properties have full right to sell and are not restricted by the pending foreclosure status.

Should I wait for the auction date to buy?

• Pending foreclosures that are not cured prior to the first Tuesday of the month are offered to the public at the foreclosure auction.
• All foreclosure sales in Georgia are held on this set date on the Superior Court steps of the particular county between 10:00 AM and 4:00 PM.
• The auction sale provides buyers a method of obtaining properties outright, without the need for negotiation with owners and realtors.
• This method is "Buyer Beware" and third party bidders are looking to buy at the lowest price to value possible.
• The purchaser rarely has the opportunity to closely inspect or know the true condition of the property.
• Be sure to have a title search completed prior to the sale.
• Know the position of the loan and be aware of any liens that would not be extinguished through the foreclosure sale.

What is the auction process?

• At the foreclosure sale, the lender's attorney must "cry the bid" to the public.
• The opening bid is placed on behalf of the lender and the amount generally includes the remaining principal balance of the loan, back payments, accrued interest and attorney fees.
• Successful bidders at the auction are required to tender the full amount of their bid in cash or certified funds immediately upon the conclusion of the sale.
• Once the sale is complete, the attorney prepares and issues to the winning bidder a Deed under Power of Sale which is recorded in the county real estate records.
• This deed transfers property ownership to the winning bidder.

What happens if there are liens on the property?

• Foreclosure sales in Georgia extinguish any liens junior or subordinate to the lien being foreclosed with a one exception.
• IRS liens remain on the property for 120 days after the sale.
• The IRS must take action to protect its interest during this period or this right of redemption is waived.
• Foreclosure sales are always sold subject and subordinate to any lien of record recorded prior to the foreclosing lien.
• Unpaid real estate property taxes fall into this category and are also always senior in priority.

If I buy a property at the foreclosure sale, can the former owner get it back?

• There is no right of redemption in Georgia. The owner may not reclaim the property after the sale.
• Foreclosure sales are final but Georgia does give the lender the right to rescind the sale within 30 days so long as title has not been transferred to the successful bidder.

Who collects this information?

• Equity Depot, is a private company based in Alpharetta, GA.
• The company was created and is managed by investors who have broad experience and knowledge in the real estate investor market.
• Equity Depot compiles data from a broad set of qualified sources, pins property and owner information in an easy to use, web-based format

Article courtesy of The Atlanta Journal-Constitution

When Will the Housing Market Rebound?

by A.C. Roda

For many, that is the million dollar question. And what a good question it is. The bottom line answer is that no one really knows for sure. However, the experts are talking and the overall consensus is that it will take the better part of 2008 before the market shows significant signs of improvement.  Of course, a market shift is greatly dependent on several conditions:

Homebuilders must continue to slow the production of new homes. There has been an influx of new homes over the last couple years which some say has contributed to the slowdown. It goes back to Economics 101, simple supply and demand.

Home sellers need to be realistic in pricing their homes. Many sellers are still hoping to ride the wave of the pricing surge that was experienced during 2003 – 2005. Real estate agents across the county are encountering sellers unable to recognize market pressures indicating that it is time to reevaluate their asking price. For a market snapshot of the Atlanta Metro, including the Southern Crescent area of Peachtree City, head over to www.AtlantaHomesSouth.com for current home listings and additional market information.

Lenders and creditors need to loosen their grip on financing. Loan modifications to help stop additional foreclosures and creditors loosening the purse strings a bit will enable more consumers to buy homes using more traditional financing. No one wants to repeat the sub-prime and non-traditional mortgage debacle we experienced recently.

Every cloud has a silver lining, and the housing market is no exception. There are some encouraging signs that the market is already on the mend.

FHA loan applications (and approvals) have been rising significantly. The National Association of Realtors (NAR) has been lobbying heavily for major FHA reform and wants to see greater flexibility and higher loan limits. If this happens, the use of FHA loans could greatly increase, offering additional options to potential first time homebuyers who might have previously relied on sub-prime loans for financing.

There has also been talk of raising the loan limit for Fannie Mae/Freddie Mac repurchased loans, which could significantly impact home buying costs in high cost regions of the country such as California, Seattle, Boston, New York, D.C., and South Florida.

In addition, the Federal Reserve continues to lower mortgage rates. Congress recently passed, and the president signed, the “Mortgage Forgiveness Debt Relief Act of 2007” and policymakers are working on legislation to assist homeowners even further.

There is one group, however, who are reaping the benefits of this down market – Investors. Investors benefit most when they are able to purchase in a down market and sell when the market turns around. If all indicators are correct, this is exactly what the market is experiencing. According to HomeVestors, you know, the people who buy ugly houses,

Atlanta is one of the top ten markets for investing. To learn more about buying and/or selling in this ever-changing market, consult Kem and A.C. Roda, the ‘Home Team’ at Home Source Realtors. You can find them at www.WeSellPTC.com or KEMandAC@WeSellPTC.com or give them a call at 678-234-1239.