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Georgia Foreclosure Laws

Both in and out-of-court foreclosure preceedings are available in Georgia. An out-of-court foreclosure in Georgia can be completed in less than two months.

Pre-Foreclosure Period

A court foreclosure occurs when there are title problems or the mortgage or trust deed lacks a clause permitting an out-of-court proceeding. The process begins when a lender files a petition describing the situation, the property, and the default amount. The borrower then receives a 30-day written notice in which the default must be paid to the court. If the default is not resolved, a Georgia foreclosure sale is scheduled.

The out-of-court process is more common, as most mortgages and trust deeds contain a clause giving a lender the power to sell the property outside of the court system. The lender starts the foreclosure process by scheduling a foreclosure sale. Georgia does not require lenders to warn the borrower before starting the foreclosure process, although the mortgage or deed of trust might demand this.

If the mortgage or deed of trust allows, the borrower can stop the foreclosure by paying off the default amount plus applicable costs, but Georgia state law does not automatically give this reinstatement right to the borrower. The borrower can always stop the foreclosure by paying the total loan balance.

Notice of Sale/Auction

A notice of sale is published once a week for the four weeks before the sale. The notice is also sent to the borrower a minimum of 15 days before the sale date. The notice must include the date, time, and location of the sale, a description of the property, mortgage information, and the lender and borrower names.

The sale of foreclosure homes in Georgia is at the county courthouse on the first Tuesday of the month between 10:00 am and 4:00 pm. The winning bidder, if other than the lender, is required to pay the full bid amount to the person conducting the sale immediately following the sale. If a foreclosure sale is cancelled, the foreclosure process starts over again.

After court-ordered foreclosure sales, a confirmation hearing is scheduled and the borrower is notified within five days of the hearing. If the sale price of the property is at least market value, the court confirms the sale. If not, the court may order a new sale.

There is no right of redemption for the borrower following a foreclosure sale in Georgia.

Click here for a current list of foreclosure homes in Peachtree City Georgia and Metro Atlanta.

Georgia Foreclosure Home Bidding Rules

If you are looking at a bank foreclosure, the rules of bidding are fairly simple. Contact a real estate agent with experience in the Atlanta area foreclosure market. Next:

• Have your mortgage officer draw up a pre-approval letter for no more than the price you plan to offer on the Atlanta foreclosure property.
• Have your real estate agent send the listing agent a letter of intent for the foreclosure home. Click Here to contact a real estate agent with extensive knowledge of the Atlanta and Peachtree City foreclosure market.
• The listing agent will then send the letter of intent to the bank holding the foreclosure property.

How Much to Bid

One of the main considerations when thinking about placing a bid on a foreclosure home is how much to bid. Banks determine the price they are willing to accept for a foreclosure property on a case by case basis. Be sure to consult with an agent experienced in Atlanta area foreclosure properties to obtain accurate tax records for determining the amount mortgaged prior to the foreclosure. Do not try to bid less than the bank owes on a foreclosure property until it has been on the market or three to six months.

The best bet is to get educated, get a good real estate agent with experience in the Atlanta and Peachtree City foreclosure market and win at the low-priced foreclosure home game.

To get started, Click Here to get connected to an agent familiar with the Atlanta and Peachtree City, Georgia foreclosure market and see a list of homes currently available for sale.

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Buying Pre-Foreclosure

Finding and filing properties

Develop a system to keep track of properties that interest you. A good tracking system is important since most pre-foreclosure buyers pursue many properties over a period of several months.

After you find a property online, it's a good idea to drive by the property to get a better idea of the property's condition and the type of neighborhood.

Confirming pre-foreclosure status

When a property enters pre-foreclosure, the owner usually has at least 2-3 months to reinstate the property by paying off the amount in default. The reinstatement stops the foreclosure process, so it's important to find out if a property has been reinstated before proceeding. The best way to check if the property has been reinstated is to call the trustee or attorney assigned to the foreclosure. The trustee cannot typically answer questions about the property; they can just let you know if the property is still in foreclosure or not.

Researching the potential bargain

Find out as much as you can about the estimated market value of the Atlanta pre-foreclosure property, how much is owed on the property and if the owner has any other liens against the property. This is all public information and you can research on your own with the county recorder. This process should not take more than a day or two, because you don't want to delay long before contacting the owner in default.

Contacting the owner in default

You or your real estate agent should initiate contact with the owner to express your interest in the property. Before you expend the time and effort to contact the owner, make sure you're fully prepared to buy.

If the owner has decided to list the property for sale, you can simply contact the listing agent. Even though the property is listed with a real estate agent, you can still negotiate a good deal because you know the owner has a limited amount of time to sell before the bank repossess the property or sells the property at public auction.

If the property is not listed with a real estate agenet, contact the owner by mail to start. The basic message to communicate to the owner is that you're interested in buying the property and you want to work out a purchase agreement that benefits both parties.

Don't be surprised if the owner does not respond to the mail immediately. In most states, the owner has several months between the initial foreclosure notice and the public auction. During this time the owner will consider all the options available, including refinancing or selling.

Many successful Georgia pre-foreclosure buyers and investors send quite a few postcards to properties in their area before they find an owner who is interested. It's not uncommon to send out several postcards to the same owner during the foreclosure process. The owner may be more interested to sell as the auction date looms closer. If the owner doesn't respond to postcards, some buyers and investors of Atlanta pre-foreclosure properties will try to reach the owner by phone or in person. If you do this, be prepared for a possible rude response as these methods of contact are more inherently confrontational. And always keep in mind that the owner in default retains ownership rights to the property during the pre-foreclosure period. If they are not interested in talking with you, it's time to leave.

If the owner rejects all of your contact attempts, you may still have a chance to purchase the property at public auction, which occurs if the owner doesn't sell or pay off the amount owed during the pre-foreclosure period. You could also call the trustee periodically to check if an auction has been scheduled.

Negotiating a purchase agreement

Once you have made contact with the owner, you should meet with them for further discussion about the property. As part of this meeting, or a later one, you should arrange to walk through the property to make sure it meets your criteria as an investment property buyer.

Because owners in foreclosure may not have the money to make repairs to their property, you might be willing to buy the property "as is." But you still want to keep a tab of estimated repair costs and subtract them from your purchase offer. Your willingness to put some "sweat equity" in the property after you purchase it will increase the chances of realizing a good bargain.

If you and the owner both agree to proceed, you need to negotiate the terms of a purchase. These negotiations will involve you, the owner and the foreclosing lender. A real estate agent can be a valuable resource during the negotiating process.

Owners might be more willing to work with you if you are flexible to help them out in creative ways that address their situation. If you're purchasing the property as an investment, you may let them stay and pay rent until you decide to resell the house. There are myriad ways to work out an agreement that benefits both parties. Remember, just selling the property during pre-foreclosure allows owners to avoid a foreclosure-marred credit history, making it easier for them to find a new place to live.

While negotiating the purchase agreement with the owner, you should also contact the foreclosing lender and any other lien holders. You want them to know you plan to purchase the property and satisfy any liens against the property. You also may be able to negotiate a lower payoff amount to satisfy the debts owed. Since you're saving them the trouble of pursuing and collecting the debt owed them, some foreclosing lenders and lien holders will clear liens on a property for less than 100 percent of the amount owed. This is another way to realize a bargain during pre-foreclosure.

The goal for you as a buyer of pre-foreclosure properties is to purchase a property at least 20 percent below full market value, although better deals are often possible. When determining the final purchase offer, you should also take into account the rate of real estate appreciation in the area and the potential for increasing the house's value by making repairs and improvements.

Closing the deal

Once you've arrived at an agreement with the owner in default, the foreclosing lender and any other lien holders, you can put the agreement in writing. If you're not familiar with how to draw up a purchase agreement, you should have a local real estate agent or real estate attorney help.

Any purchase agreement should make closing the deal contingent on a full title search conducted by a title company or attorney. The purchase agreement should also allow for a professional inspection of the property before closing the deal.

An escrow company, who acts as a third party, can manage the transfer of money and property ownership. Assuming that you have your financing secured, this should be a fairly smooth process.