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Stages of Forclosure

Pre-Foreclosure (short sale): There are some fantastic opportunities to purchase properties under market value prior to them going into foreclosure. A home owner that is headed into foreclosure may elect to sell the property prior to the bank or government forcing the issue.

Sounds like a good idea but what happens if similar homes in the area are selling for $200,000 and the seller owes $275,000 to the bank to clear the mortgage? A short sale is where the home owner gets the bank to forgive part of the mortgage in order to enable the sale to go through. 

Why would the bank do this? It costs them a lot of money to sell a home through the foreclosure process. If they believe that the homeowner will default on the mortgage anyway and it makes financial sense the bank will proceed with a short sale. We can help you navigate this process. If you have questions please call us at 708-434-1165.

Auction: The next stage of a foreclosure is an auction. The bank does not own the property but it is forcing the property to be sold so that it can recoup some of the money that they are owed. There are some additional challenges to buying real estate this way. 

The first is that here in the Chicago land area they require 25% of the total purchase price at the auction followed by the rest within 72 hours (or something close to this).  So really you need cash to buy these homes. 

The second issue is that the buyer is responsible for all liens (past taxes, mechanics liens, code violations, etc) associated with the property whether they are disclosed or not.  Additionally and more importantly if the property is occupied then the responsibility to evict lies with the new owner.  Because of the way the laws are written this process can take a year or longer in cases when the squatter knows how to plays the eviction game in court to his or her advantage.

Foreclosure (bank owned, REO): If the property does not sell at auction then the bank takes possession.  They evict anyone living in the property. They clean up outstanding liens and they put the home on the market looking to sell it quickly (30-45 days). The bank does not want to be a landlord.  They want to unload the home so they price it to sell. Of the 3 stages I have listed this is probably the easiest one for the average buyer to complete a purchase.

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917 78Th Street Unit 101W, Chicago

Check out this well maintained 2 bedroom/2 bathroom condo on a tree lined street. Unit shows pride of ownership. Gleaming hardwood floors throughout. Kitchen with gra...

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3133 Lakewood Avenue Unit 4E, Chicago Illinois 60657


3133 Lakewood Avenue Unit 4E, Chicago

Newer construction 2 bed 2 bath LOFT in the the heart of Lakeview in an elevator bldg!Upgrades include hardwood floors, plush bedroom carpet, w/d IN UNIT, private balcony...

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5950 Elizabeth Street, Chicago Illinois 60636


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3778 Parkview Terrace, Chicago Illinois 60618


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The house of your dreams is just 15 minutes away from downtown. It is next to the kennedy express way and walking distance to the blue line. It's 2 blocks south from ind...

  • Beds 5
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5806 North Napolean Avenue, Chicago Illinois 60631


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8515 South Kildare Avenue, Chicago Illinois 60652


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Long time owner has taken exceptional care of this ranch. Three spacious bedrooms. Ceramic bath. Wood cabinet kitchen with built-ins and a large dinette. Full finished ba...

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6589 Caldwell Avenue, Chicago Illinois 60646


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4800 Neva Avenue, Chicago Illinois 60656


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2323 Pershing Road Unit 621, Chicago Illinois 60609


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Mckinley park loft - 1485 sq ft. - 2Brs, 2 full baths + den floor plan w/ 10.5 ft concrete ceilings featuring hdwd flrs, granite counters, stainless steel appliances, ov...

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4164 Emerald Avenue, Chicago Illinois 60609


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Beautifully maintained 2 story single family home. Everything is done for you. French patio doors lead to a swimming pool with custom deck surround for your summer fun. F...

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611 Wells Street Unit 907, Chicago Illinois 60607


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Beautiful wrap around end 2BR + den condo with East,West,South views from floor to ceiling windows. New Hardwood floors and new carpet in bdrms. Lrg balcony, designer gal...

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334 Schiller Street, Chicago Illinois 60610


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Finally on market bring your investors, developers. No showings until further notice. Drive by only send your offers.

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9941 Hoyne Avenue, Chicago Illinois 60643


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Beaut Spanish Bungalow w/vaulted beam ceiling & floor to ceiling wb fireplace. Tastefully decorated and spotlessly clean. Cent air, thermal windows, flawless hardwood flo...

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2857 West Christiana Avenue Unit G, Chicago

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