Leslie Rainey, Real Estate Agent

Leslie Rainey, Real Estate Agent

I am committed to making the buying and selling process a happy experience for my clients through a positive attitude, persistence and hard work. There are so many reasons why I love being a realtor but, seeing the smiles when my clients find “the right one” is purely delightful!

(816) 728-7010 Mobile
(816) 454-6540 Office

Email: leslierainey@rmxkc.com

REMAX Innovations
3200 NE 83rd Street<br/>Kansas City, MO 64119

Open in Google Maps
My Experience is Your Next Move :: Contact Me Today 816-728-7010
  • Home
  • About Leslie
    • Realtors Do Good Work
    • Leslie’s Paul Harris Fellow Award
  • Listings Search
    • Featured Listings
    • Basic Search
    • Advanced Search
    • Address Search
    • Map Search
    • MLS Listing Search
    • Search by City
    • Emailed Listings Signup
  • Happy Clients
    • Testimonials
    • Video Testimonials
  • Resources
    • Mortgage Calculator
    • Trusted Service Providers
  • Community
  • My Account
    • Sign Up
  • Contact Leslie
Sunday, 19 June 2016 / Published in Investing in Real Estate

Foreclosures

Are foreclosures a good investment?

A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Thousands of homes end up in foreclosure every year. Economic conditions affect the number of foreclosures, too. Many people lose their homes due to job loss, credit problems or unexpected expenses.

It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.

Are there different types of foreclosures?

Judicial foreclosure action is a proceeding in which a mortgage, a trustee or another lien holder on property requests a court-supervised sale of the property to cover the unpaid balance of a delinquent debt.

Non-judicial foreclosure is the process of selling real property under a power of sale in a mortgage or deed of trust that is in default. In such a foreclosure, however, the lender is unable to obtain a deficiency judgment, which makes some title insurance companies reluctant to issue a policy.

How do I find a foreclosed property?

In most states, a foreclosure notice must be published in the legal notices section of a local newspaper where the property is located or in the nearest city. Also, foreclosure notices are usually posted on the property itself and somewhere in the city where the sale is to take place.

When a homeowner is late on three payments, the bank will record a notice of default against the property. When the owner fails to pay up, a trustee sale is held, and the property is sold to the highest bidder. The financial institution that has initiated foreclosure proceedings usually will set the bid price at the loan amount.

Despite these seemingly straightforward rules, buying foreclosures is not as easy as it may sound. Sophisticated investors use the technique so novices may find themselves among stiff competition.

How does HUD affect my buying a foreclosure?

If you are strapped for cash and looking for a bargain, you may be able to buy a foreclosure property acquired by the U.S. Department of Housing and Urban Development for as little as $100 down.

With HUD foreclosures, down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from 5 to 20 percent. But when the property is FHA-insured, the down payment can go much lower.

Each offer must be accompanied by an “earnest money” deposit equal to 5 percent of the bid price, not to exceed $2,000 but not less than $500.

The U.S. Department of Veterans Affairs also offers foreclosure properties which can be purchased directly from the VA often well below market value and with a down payment amount as low as 2 percent for owner-occupants. Investors may be required to pay up to 10 percent of the purchase price as a down payment. This is because the VA guarantees home loans and often ends up owning the property if the veteran defaults.

If you are interested in purchasing a VA foreclosure, call 1-800-827-1000 to request a current listing. About 100 new properties are listed every two weeks.

You should be aware that foreclosure properties are sold “as is,” meaning limited repairs have been made but no structural or mechanical warranties are implied.

You can only purchase a U.S. Department of Housing and Urban Development property through a licensed real estate broker. HUD will pay the broker’s commission up to 6 percent of the sales price.

Where do you find government foreclosed homes?

The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD. These properties are available for sale to both homeowner-occupants and investors.

You can only purchase HUD-owned properties through a licensed real estate broker. HUD will pay the broker’s commission up to 6 percent of the sales price.

Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from the conventional market’s 5 to 20 percent.

Buying a foreclosure property can be risky, especially for the novice. Usually, you buy a foreclosure property “as is,” which means there is no warranty implied for the condition of the property (in other words, you can’t go back to the seller for repairs). The condition of foreclosure properties is usually not known because an inspection of the interior of the house is not possible before the sale.

In addition, there may be problems with the title, though that is something you can check out before the purchase.

Buying directly at a legal foreclosure sale is risky and dangerous. It is strictly caveat emptor (“Let the buyer beware”).

The process has many disadvantages. There is no financing; you need cash and lots of it. The title needs to be checked before the purchase or the buyer could buy a seriously deficient title. The property’s condition is not well known and an interior inspection of the property may not be possible before the sale.

In addition, only estate (probate) and foreclosure sales are exempt from some states? disclosure laws. In both cases, the law protects the seller (usually an heir or financial institution) who has recently acquired the property through adverse circumstances and may have little or no direct information about it.

Can I get financing on a foreclosure?

One reason there are few bidders at foreclosure sales is that it is next to impossible to get financing for such a property. You generally need to show up with cash and lots of it, or a line of credit with your bank upon which you can draw cashier’s checks.

What are trustee sales?

Trustee sales are advertised in advance and require an all-cash bid. A sheriff, a constable or lawyer acting as trustee usually conducts the sale. This kind of sale, which usually attracts savvy investors, is not for the novice.

In a trustee sale, the lender who holds the first loan on the property starts the bidding at the amount of the loan being foreclosed. Successful bidders receive a trustee’s deed.

What you can read next

Vacation Homes
Condos, Apartments & Single Family
Fixer Uppers

Listings Search Options

  • Featured Listings
  • Basic Search
  • Advanced Search
  • Address Search
  • Map Search
  • Search by City
  • MLS Listing Search
  • Emailed Listings Signup
  • Contact Leslie

Leslie and RE/MAX

  • Re/MAX Success Formula

Buying or Selling a Home?

  • Buying Your Home
  • Selling Your Home
  • Owning Your Home
  • Your Mortgage
  • Investing in Real Estate

Discover Our Community

  • About Kansas City
  • Kansas City Schools
  • Parks of Greater KC
  • The Arts
  • Fun Activities

I WORK FOR YOU

Leslie RaineyI work hard to provide each client the most positive real estate experience possible.

A vital part of the industry today is web technology. With that in mind, I designed my website to be fun, informative and simple for you to use. And please feel free to contact me at any time!

P.S. - I Love My Clients!

FOLLOW ME

  • Facebook
  • Twitter
  • LinkedIn

IMPORTANT PAGES

  • Home
  • Contact Leslie
  • Testimonials
  • About Leslie
  • Resources
  • Community
  • Privacy Policy
  • Terms of Use
  • Disclaimer

GIVING BACK TO THE COMMUNITY

Leslie Rainey Supports Children's Miracle NetworkLeslie is a firm believer in giving back to her community and sharing her success with those that are less fortunate.

She does this by donating a portion of every one of her paychecks to Children's Miracle Network, and by supporting causes that protect and care for the needs of children.

Copyright © 2025 Leslie Rainey, All Rights Reserved. Call Today (816) 728-7010
TOP