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Investing in Florida Foreclosures
One of the biggest advantages to investing in Florida foreclosures is the old real estate adage of “location, location, location.” Florida has mild winters and over two thousand miles of shoreline. When combined with being an international trade center, having a space center that brings in billions of dollars, a thriving construction industry, and one of the lowest tax burdens for residents in the country, Florida is a can’t miss for real estate investors.
Florida is a judicial foreclosure state, which means the court handles the foreclosure process and decides on the time schedule for the foreclosure.
The Florida foreclosure process begins when the lender files a legal action against the owner. The owner is then notified of the impending suit. If the owner does not respond within the allotted time, the lender can ask for a ruling. If the owner does respond, the court makes the determination of whether the owner is in default.
If the court decides the owner is in default, the judgment will include the total amount due and the date of the property sale, placing the property is in pre-foreclosure. In Florida, owners have the right to redeem the mortgage up to the date of the court-ordered sale. This presents two advantages for the pre-foreclosure investor:
* Florida law allows the owner to sell the property in order to pay the outstanding debt. While the property is in pre-foreclosure, the owner will be more willing to sell the property in order to avoid having a foreclosure on their credit report.
* The judgment is part of the court records for the foreclosure, and they are public record. This allows the investor to see the total amount due on the loan in order to pay off the debt. The investor has a starting figure from which to work in planning negotiations with the owner and the lender. The investor also knows the date of sale, so the timeframe for negotiations is clearly stated.
There is a regulation for Florida foreclosures that investors need to keep in mind. Whether the sale is a result of the court order or the owner selling in pre-foreclosure, either party has the right to demand a review. During review, the court will examines the sales documents to make sure the property was sold for a fair price and that everything was conducted legally. If there are any discrepancies, or if the price paid is not a fair price, the court will void the sale.
If the property goes to auction, the auction typically takes place at the county courthouse, with the clerk of courts in charge of the sale. The winning bidder must pay a 5% deposit at the time of the auction, with the balance paid by the end of the day. If the winning bidder does not pay in full by the end of the day, a new sale date is set. If the winning bidder does pay, the clerk issues a certificate of sale. Ownership is transferred within 10 days if there is no dispute of the sale.
About the Author: Alex Diaz has worked in the foreclosure business since 1998. Visit his website for Florida Foreclosures
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