So You want to buy a Foreclosure? *BWAHAHAHA!*
So you want to buy a Foreclosure because you hear in the Media how great a market is for that property? And how easy it is to fix and flip? And you’ll make a ton of moolah?
*Snort* (Excuse me, that was the sound of me spitting out my coffee…)
Do you have a lot of cash, time, patience and a strong stomach? Because at the bare minimum, those are what you are going to need to succeed.
|First of all, let me explain the foreclosure process here in Hawaii. Don’t know what it is elsewhere, but this is where my Real Estate license hangs. Talk to a Realtor in your area if you don’t live here.In Hawaii, there are two ways a foreclosure occurs: either a judicial or non-judicial foreclosure process.
The judicial process of foreclosure involves the filing a lawsuit by the holder of the mortgage or deed of trust to obtain a court order to foreclose. This is used when no power of sale is present in the mortgage or deed of trust. The court declares a foreclosure and the property is auctioned off to the highest bidder. You will go to the auction with a cashiers check for 10% of the sale price and have to cough up the balance in cash at the end of the day if you are the highest bidder. These are usually held on the Courthouse Steps and can be called “Sheriff’s Auctions” here in Honolulu.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. This states that the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. The lender or their representative, typically referred to as the trustee, may execute the sale.
There are all sorts of notices and time frames that have to occur in a non-judicial foreclosure, I’m not going to go into that here. Speak to an Attorney, Grasshopper…
Up until three days before the sale, the borrower may stop the sale by paying the lien debt, costs and attorney’s fees. Also, even if your sale goes through and you are the proud owner of a foreclosed property, in Hawaii if the property was sold because of outstanding taxes, the seller has up to one year to get current with the taxes and they get the house back. And YOU, lovely buyer, are out of your money.
I have done quite a few “BPO”s (Broker Price Opinions) for banks looking to do a Short Sale (more on that next post) prior to foreclosure of a property. This consists of me personally going out to the house to place an opinion of sale price on the property for the bank. The home may be in pretty good shape at the time I assess it. And then I have gone back to those same properties after the foreclosure and the occupants have been evicted.
To say these properties have been trashed would be like saying Katrina was a Spring Shower. Plumbing ripped out, copper wiring ripped out, Appliances removed or destroyed, walls smashed in and bathtubs used as toilets. And those are some of the clean ones! Vindictive former owners will destroy a property as a “Get even” with the evil bank that talked them into a big loan they could not afford. Yep, it’s always the Lender and the Real Estate Agents fault, no personal responsibility there! I will be the first to admit there were quite a few lenders and agents that were crooked and went into a transaction just to make money, but don’t tell me there were not any greedy buyers involved. If you believe that I have a nice Bridge in Brooklyn for sale…
I’m not going to outline the process here, if you still want to buy a foreclosure you should probably saddle up with a good Real Estate Attorney. And I’m not going to help you buy a foreclosure. I have more fun things to do like Root Canal Surgery…
Aloha from the Hawaii Real Estate Biz!
Archive for the Category ◊ General Oahu Moans ◊
On Friday Night December 26th at 6:45 PM I was sitting on my Lanai (Porch) Watching a spectacular lightning storm dance up the Kooalau Mountain range when the power went out. Not just a little bit out, the whole valley below me was dark. All of Kaneohe! Cable was down too! No Food Network Iorn Chef!!!
I do have some serious APC Back Up Batteries, but didn’t want to use them up… who knows how long this was going to last? So I fired up my emergency lights and cell phone and got online to Twitter via my T-Mobile Dash Smartphone.
Twitter, for those of you who may not be familiar with it, is a social networking site where you can post short messages called Tweets. People follow your tweets and you can follow theirs. So instantly I was in contact with people all over the island and able to find out the extent of the power outage.
The whole Island of Oahu was in the dark. I Tweeted back and forth to find traffic lights were down, people were stuck in elevators and in many areas there was no water! The airport was dark, flights were being cancelled, travelers stranded. Tourists swarmed out of their darkened hotels in Waikiki to fill the streets inquiring what was going on! Twitpics (Pictures posted to Twitter) showed the extent of the mess island wide.
So it happened that our illustrious Mayor Mufi Hanneman’s first order of business was to deliver emergency generators to the 9 million dollar beach front estate on the windward town of Kailua where Barack Obama and his family were vacationing. Uh, Mufi? I pay your salary: can you decide your first order of business is the safety and disseminating information about the situation to your constituents? Guess not. Three generators had already been installed in the vacation home and HECO set up another generator in the neighborhood in case it was needed. But what about MY refrigerator? MY needs? MY warming beer?
By now my fellow Twitterers were on the ball and furiously Tweeting back and forth. We all found out that that Hawaiian Electric thought a lightning strike was responsible or maybe not. We kept tabs on each other throughout the night. By morning some areas had power back on, mostly those closest to the Generating Stations on the leeward side of the island. The only area on the windward side of the island to have power back on Saturday morning was Kailua. (See above ref: Guess who was staying in Kailua?)
My power came back on at 12:45 PM on Saturday, approximately 18 hours after shutting down. Right when my power came back on I saw a huge oily plume of smoke rise up out of the valley . A major fire had erupted close to the Kaneohe Power Plant! I was able to snap it on my phone and Twitpic it: who had any more information? Was everybody safe? Was the power going down again?
Today I’m thankful I live in a safe neighborhood, neighbors are good people. Realized I should have had an extra case of bottled water, kept my old propane BBQ and bought more emergency lights and batteries. So I will put those things on my shopping list in case the next time around I’m in the dark longer. As of today, Sunday afternoon, there are still some areas of Oahu without power . Water is to be conserved island wide. And Twitter is not to be dismissed lightly as a toy, as some will say. It kept our whole community connected and informed when the traditional airwaves and media could not.
Twitter is my friend.