Even though Austin's market is one of the most stable in the USA, we still have some foreclosures out here.  Most of these foreclosures are recently built homes that people had purchased but had some tragic event lead to their inability to pay for the house.  Normal reasons are:

1. Lost job or drastic job change
2. Family illness or traumatic family event
3. Divorce
4. Over-financed the house
5. Pulled too much equity out
6. and lots of other reasons...

This is your opportunity to get INSTANT EQUITY when you purchase.  The way to make money in real estate is to make it when you BUY.  Foreclosures allow you a guaranteed way to do this, you just need to find one.  We have set up a search that combs through hundreds of listings and picks out the foreclosures ready to buy.  Just click on the search link below and look for the Foreclosures page.

Austin Foreclosure For Sale Search

Foreclosures come in the following flavors:

Bank Foreclosure - known as an REO or Short Sale.  REO means "Real Estate Owned" by the bank.  It is THE best way to buy a foreclosure because bank foreclosures normally are in better condition, better areas and are more willing to make a deal.  A bank representative called a Loss Mitigation Rep is the person who calls the shots on the bank's end, while your Realtor helps you negotiate your offer with this person or the bank's Realtor.  The bank accepts a LOSS in order to get the property off of its books so that the bank can go and lend more money to other people.  These are normally NOT auctions, you go through the normal procedure of making an offer and getting a response.  Sometimes the owners are still living in the property.  This is not a big deal and has no bearing on the transaction or offer in the eyes of the bank.  On or before the sale, they are required to move out.  Bank foreclosures are controlled locally, they are not openly available to everyone outside of the local area -- so, when you make an offer, you are not fighting with hundreds of other people across the globe.

HUD Foreclosure - These are properties that were purchased using an FHA guaranteed goverment loan.  The government is the bank and is willing to put these homes up for auction online -- so you will be fighting with people from around the world on these homes.  The property condition of most HUD foreclosures is pretty poor, below average condition.  Normally the previous owners have destroyed, wrecked or stolen items in the house.  You can expect a lot of work to be invovled in bringing the average HUD up to habitable standards.  Now, there are always exceptions, but we rarely see HUD's that simply need carpet and paint.  More often they need an entire kitchen with the kitchen sink and cabinets!  HUD's are Government Auctions, plain and simple.  They have strict strict strict deadlines and if you miss them you risk foreiting your earnest money.  You need a HUD licensed Broker to represent your offer in the Auction.  We are HUD licensed of course!  There is a timeline below associated with HUD foreclosures that you MUST be familiar with before you start bidding.  Owner occupant buyers are highly favored, we have much more flexibility in the dates below if you are going to actually live in it.

HUD Foreclosures Bidding Time Line

Listings are posted on Thursday of each week at: www.bidselect.com (TX area)

Days 1-5 - are reserved for owner-occupants. Bids are collected during that period and opened on the first business day after the initial five days, which is usually Tuesday. All bids from owner occupants that come in during that time are treated as if they came in simultaneously. The property is awarded to the highest acceptable bid. If no bids are acceptable the process continues as outlined below until an acceptable bid is received.

Day 6-10 - From day 6 on, the bids are opened on a daily basis and responded to daily if received by 11:59 pm. During the 6-10 day period, only bids from owner-occupants and non-profit corporations are considered.

Days 11-45 - during this period all bidders are eligible and all bids are considered on a daily basis. All bids that come in on a given day will be opened on the next business day and considered as if they came in simultaneously.

Days 46 and beyond - at the end of 45 days the property is re-evaluated and put back on the market as a new listing. The price may be reduced. The first 5 days of bidding in this new listing period will be reserved for owner-occupants although investors may bid at this time.

Bid Results - are posted on www.bidselect.com usually before noon on the next business day. There are several ways BidSelect identifies the status of your offers to you. After offers have been reviewed, you will receive an email indicating either that your offer was acknowledged as the winning offer or that your offer was reviewed but was not selected as the winning offer. You can also view the status from your Buyer Center account and, after offers have been reviewed, they will appear in the Search Offer Results page located under Buyer and Broker Info.

If the bid is accepted, you have 48 hours to fill out all of the documents in the contract package and return it via overnight courier. Deadlines are very strict and not getting the package back within 48 hours is grounds for rejection of the bid. No bid obtains final acceptance until all of the paperwork has been returned and signed. Once your contract package is received, it will be executed or ratified and returned within two days to the broker and address designated on the contract. Make sure that the broker's signature on the contract is the same as the signature that is on the SAMS forms the broker signed when they registered to become a HUD broker.

Return of Earnest Money

Investor Buyers
• UI - (un-insured by HUD) forfeits 100% of earnest money for any reason.
• IN - (insured by HUD) forfeits 50% of earnest money if HUD determines buyer is unacceptable, 100% for any other reason.
• Vacant Lots -forfeits 100% of earnest money.
  
  Owner-Occupant Buyers
• 100% is returned to the buyer if requested within 15 days and there is adequate documentation: death in the immediate family, serious illness in the immediate family, loss of job by primary bread winner, purchaser is not acceptable in an IN sale, UI buyer is not acceptable, or other good cause.
• 50% return of earnest money - UI sale where the buyer has performed but for some reason the lender can not lend.
• 100% forfeiture where there is no documentation submitted or the documentation submitted is an unacceptable reason for the purchaser not to close.

Extension of the Contract Date
Extensions are granted in 15 day increments and may be applied for five days before the closing date. The cost for an extension is $150 for a sales price of $25,000, $225 for $25,001 to $50,000, and $375 over $50,000.