Sun City Mesquite
Sun City Mesquite, Mesquite Nevada

Many people are interested in buying a foreclosure because they've heard they can get a property for cheap. I'm going to go over the different phases of the foreclosure process, the pros and cons of buying a foreclosure, and how to actually buy a foreclosure in Mesquite Nevada, or in any other city. So first let's get into the foreclosure process.

Foreclosure Process

The foreclosure process starts when a homeowner or a borrower gets behind on their payments. If they're not able to get current or work out some kind of loan modification with the bank, then the bank would begin the foreclosure process, and they would file for foreclosure in mesquite nevada or any other city. Once the bank files for foreclosure, they announce this publicly on the county website or in the newspaper. At the day of the auction, the public is allowed to come and bid on the property. If someone wins the bid, the bank gets paid off with the money that the buyer from the auction is giving, and the buyer will get a sheriff's deed. There are a lot of terms for the sheriff's sale or auction, or auction at county steps. There are a lot of different terms for it. But basically, the public can come and bid on the property to purchase it.

Normally, the starting bid is the amount owed on the property. If no one bids on the property or they don't bid high enough, the bank would take control of the property and complete the foreclosure. Normally after the bank takes control of the property, they would hire a real estate agent to list the property for sale, where you could see it on and the other websites like And of course, your own realtor would be able to send you the listing at that point. Or the bank could list it on a private auction site. There are a lot of different websites that do bank-owned auctions. Now this auction's different because the bank has already taken control of the property and some of the rules and things are different compared to the actual sheriff's sale before the foreclosure actually happens.

And so that's a very, very, very brief and dumb downed summary of the foreclosure process. And this can take weeks, months, or even years to get the bank to actually foreclose on the property. So to complete that whole process could take a very long time. This is very general information and the rules on foreclosures vary wildly from state to state.

Now that you understand the foreclosure process, let's get into how you can take action in these different phases. 

Pre-Foreclosure Phase

The first phase is the pre-foreclosure phase, and that's basically when the borrower is behind on their payments, but nothing has really happened yet. So if you find out someone is behind on their payments, or maybe they've published that there will be a foreclosure auction coming up for a listed property. If you have contact with that person, you can write them a letter or something like that saying you're interested in buying the property. And so this would be like a normal transaction, other than maybe it's not listed with a realtor. But you can for sale by the owner of the property and you can just buy it that way.

Now the pros of this are of course, there's no competition for purchasing the property because it's not on the market. So you could probably get a really good deal. Another pro is you can normally use traditional financing, FHA loan, or conventional loan, just like you were buying any other property, which makes it a lot easier.

The cons are definitely, this is a delicate situation, someone's losing their home. So you have to be very empathetic to the person and try to work out something where it helps both parties. Another problem with the pre-foreclosure is that a lot of times, the homeowner is underwater. And what I mean by that is that they owe more than the house is worth. So you'd have to work out a short sale with the bank and then you need the bank to approve the purchase of the property. Now it can be done, but it's kind of complicated. It's really more for a very savvy person, maybe an investor who's spending time marketing and looking for properties that are in pre-foreclosure, because you can work out a good deal. But you have to know what you're doing, you have to be able to negotiate, you have to be empathetic to the person that you're buying the house from. And so you've got to kind of be savvy about how to make this work. And so for a normal buyer, you're probably not going to do this.

Auction Sale

Now, the big one that's very popular and I think quite misunderstood is the sheriff sale or the auction. You can find out when the auction is on the county website or different websites, you'll be able to find out when it is, you should get a list of the properties that are going up for auction. And some sites, certain counties will list what the minimum bid is. Other than that, there's not a lot of information, you're going to have to do your own research. But basically, you go up to the county building, wherever it might be, wherever the sheriff's office is or wherever they might hold the actual sheriff's sale. And you would sit down and you would bid like an auction. If you win the bid, you need cash to be able to buy the property. Normally they'll take a sizable deposit upfront and then you might have seven days to actually close on the property and provide the rest of the money.

You'll get a sheriff deed normally, which isn't a very strong deed because there can be other liens on the property. And that's a large con to buying a sheriff sale is that you really need to do a title search or know your stuff and really know what the liens and problems with the property are. You're also not going to be able to actually view the property most times. Someone could be still living there, or you just wouldn't have access to the property. Another con really is that you have to attend whenever the day and time is. So if you're busy, if you're working another job, it might be difficult to attend the sheriff sale time.

The best thing about a foreclosure auction or a sheriff's sale is that you can get the property for very cheap if the homeowner owes a small amount of money on it, versus what the house is worth. If the mortgage on the property is really high, you're not really going to be able to get a deal. And that's why most of these properties end up not getting bid on, and go through the foreclosure process and then the bank takes over. Another con is researching the property takes a lot of time and you really need to know what you're doing.

REO Phase

And the last phase of the foreclosure, a process where you can buy the property is REO or real estate owned. This is when you actually see the property listed online, you can view it as a normal property, you'll see the listing on and the other websites.

This is probably the simplest process as far as buying a house because it's the same as buying it from a private person. Other than negotiating with the bank is much different, the property's probably in poor shape because again, it could take years sometimes to foreclose and it's been sitting vacant. You won't know anything about the property from the seller because it's the bank. So they won't tell you anything about the property.

On the pro side, you can get a little bit of a discount on the price versus if someone was living in the property and was selling it privately. This is not always the case though. Sometimes you're paying about market value.

Another con is negotiating with the bank is difficult. They are unpredictable. It's really hard to figure out what the bank's motivation is because I've seen properties that sit on the market for a long time with a lot of offers and they just don't accept them because the bank doesn't really know the market and they're trying to get certain numbers. So it can be really crazy with that.

Another major issue, especially if you're a first time home buyer is that the bank is not going to make any repairs, they're not going to disclose any issues with the property to you, you lose all your power and rights because they're going to give you an addendum to the sales contract that basically wipes out most of your rights. You're going to have to get the certificate of occupancy and that might require you to fix up things in the property before you can even close and it can really become a mess. So you have to know what you're getting into. And a lot of times when I'm consulting with buyers, we want to make sure that we get the price at a low level so that if there are repairs or things that need to be done, it still makes sense and it's still a good deal.

So buying a bank-owned property can be very beneficial, but you have to know what you're getting into. If you're not okay with having a lot of uncertainty through the process then I would stay away from it, I'd stay with a private sale versus buying a property from the bank. 

If your looking for Foreclosures that are REOs in Mesquite Nevada please contact us.