Foreclosures 101

An Action News Special Report
February 1, 2008 8:44:01 PM PST
Foreclosure is becoming a painful reality for more and more consumers. We just reported this week about 405-thousand families nationwide lost their homes last year and foreclosure filings shot up 75-percent. But on the other side of foreclosure with so many more houses on the market, a growing number of people are hoping to turn foreclosed properties into profit.

Action News went to a sheriff's sale in Burlington County. That's where real estate investor Don Pollock bids on homes every Thursday.

"It's like mining for gold, some days you're lucky and some days you're unlucky."

But before you go to any sheriff's sale you should do some research online, find out what properties will be up for auction and how much comparable properties in the area have sold for in the past six months, and then visit the properties in person.

"You don't have a right to go into the properties prior to buying them so you have to kind of gauge from the outside look what kind of work you need on the inside," Don explained.

Also talk to neighbors about the house and the area.

"We paid $133, 100," Don said.

Don just settled on a property in Camden County. After sending out contractors to do some repair work and remodeling he'll put it back on the market in two weeks for about $57,000 more than he paid for it.

But real estate is risky you have to look for hidden liens, mortgages on properties and familiarize yourself with the auction process.

"Because the sheriff's sale is intimidating you have to stand up and bid against attorneys and the seasoned investors," said Ellan Morgan of Sheriffsale.com.

Here are some tips for bidding. Keep up with property writ numbers, otherwise, you risk bidding on the wrong house. Also bid in the right amounts, in Philadelphia, you have to bid in $100 increments or the auctioneer won't recognize your bid. Make sure to bring I.D. with cash, money order or a certified check to make a deposit on the spot. For instance, in Philadelphia, you have to pay a 10-percent deposit. In Burlington County,

"At the sale, they're going to have to put 20-percent of the actual sale price down," said Leo Vanderbilt the Burlington County Undersheriff.

The remainder is due in about two weeks to thirty days depending on the county. And your opportunity to buy a foreclosed property doesn't end at auction, in fact, seasoned investors said sometimes it's better to let the bank take the property back at auction, then purchase the property from the bank once it's listed.

"This ain't a game it's real money," said Mark Wills.

Mark and his partner, John Yeager, let our cameras film them at the Philadelphia sheriff's sale, and then follow them to a property they'd just bought.

"Then we came to inspect the inside of the house today after the sale. We found that there was a family living here," John said.

John and Mark admit having to evict the current tenants is the ugly, painful part of the foreclosure business.

"If you're going to purchase houses this way it's part of the territory you have to deal with," John said.

"We can only do so much if it ain't us knocking on somebody's door it's going to be somebody else," Mark said.

PA Counties Sheriff's Sales
Philadelphia County
Delaware County
Bucks County
Montgomery County
Chester County
Berks County
Lehigh County
Northampton County

NJ Counties Sheriff's Sales
Burlington County
Camden County
Salem County
Atlantic County
Cape May County
Cumberland County
Mercer County

Delaware Sheriff's Sales
New Castle County
Kent County

Note: Some county websites list properties and detailed information. Others only publish the information in local newspapers. You may have to physically go to the county buildings for some information.

Websites to try for further research and to find information on comparable properties:
Sheriff Sale.com of Philadelphia County
Realty Trac
Foreclosure.com
Realtor.com
Cyber Home
A realtor can also find information for you.

**Note on Finding Hidden Liens and Mortgages - You must call a title search company and pay for the service OR go to your local courthouse and look up the property. Start with the clerk's office for help.


Load Comments