Lisa Petrillo mortgage foreclosure florida expert

by Lisa Petrillo found at cbs4.com

(CBS4) MIAMI If you follow the real estate market, you know that even though home sales have slowed, prices are still high. Affordable housing is still a dream for much of South Florida, but real estate experts say there may be a way to get a price break, and even make some money, in a tough real estate market, CBS4’s Lisa Petrillo shares those expert secrets as she unlocks the secrets of foreclosure.

At the Miami-Dade county foreclosure auction, similar to ones held at courthouses around the state on a regular basis, houses and condos seized by court order for mortgage default go under the gavel.

It is a misfortune for someone, but savvy real estate traders know that someone’s tragedy is another’s opportunity.

Julian Dominguez has been buying properties on the courthouse steps for nearly three decades. “In 26 years of doing it, I still get surprises,” he said, ”and there is money to be made in it.”

But making money by bidding in foreclosure auctions takes skill, and a bit of risk. Bidders are competing against the mortgage holder, usually a lender who wants to recover its loss, and seasoned investors who hope to make money.

Experts suggest getting experience by watching a few auctions with your checkbook locked away, to see how they really work, before considering making a purchase.

In one auction attended by CBS4, a home appeared to change hands for $100. However, that’s not the deal it might seem to the uninitiated.

“The property that changes hands for 100 dollars is usually going back to the lender,” said appraiser Bill Griffith.

Many of the homes he appraises are in foreclosure, and many show the neglect some homes get when their owner can’t afford to pay the mortgage.

Some of the homes he’s checked needed thousands of dollars worth of roofing, plumbing, or electrical work, and if you were to buy the home, you’d assume the responsibility for fixing the problems.

To make sure the burden is not beyond your means, or the value of the home, experts suggest you have the home inspected by a professional. something usually possible if you buy a foreclosed home through an agent or the owner.

However, purchasing a home at auction often makes that kind of detailed inspection impossible. “Foreclosures are certainly a buyer beware,” Griffith believes.
If you decided to bid, and win at auction you'll have to pay a deposit on the spot to the clerk of courts of one-point-five percent of the purchase price.

Dominguez pointed pout that the deposit can be substantial, and it’s non-refundable.

“If you put 300-thousand dollars down, you've got 45-hundred dollars that they're going to want to keep,”, he said.

That means errors can be costly.

Professionals offer some solid advice if you’ve decided the risk is worth the reward.

--Come up with a realistic budget and stick to it. In addition to the purchase price, you'll need to factor in repairs, inspections, legal fees, and something to cover the unexpected.

“Always take into account conservatively what it's going to cost, because once you're in it, you're in it,” said Dominguez.

--Do your homework. Research properties that interest you. In Miami-Dade County, as in most places in Florida, the clerk of courts lists foreclosures on line several weeks before the auction, or you can pay a service to get more detailed reports. Some services are even available on the web.

No matter how you find a property it could pay to contact the owner or agent before the auction. Sometimes they're willing to sell before the auction, or at least allow you see in advance just what you'd be buying.


-- Protect yourself. Know exactly what you're getting into legally, because there could be other mortgages involved that the foreclosure sale won't eliminate. It's money well spent to hire an attorney, check the title, do inspections, and determine a resale value before you bid.

Experts say you need to make your purchase with your head, not your heart. Dominguez puts it bluntly, “Never fall in love with a property. Never think that you could solve everything.”

In the end, it's all about the money, and that's why the lender who's foreclosing might be willing to let a home go for less than the balance of the mortgage.

How much can you realistically expect to save when you buy a home at the auction? Dominguez said a smart buyer could get a bargain.

“To make at the sale 20 to 30 percent is not uncommon, and I’ve seen more made,” he said.

And the experts say in today's real estate climate, there are foreclosures in every price range. Doing the homework, and the math, might help you get the home you've always wanted.