Foreclosures

[Novski]

Hi All,

Does anyone has any experience in purchasing pre-foreclosures or foreclosures in Melbourne or any other parts of Australia? I am not referring to Mortgagee Auctions, but rather owners who can no longer service their loan and are heading towards the bank 'taking over' their property. If so, how does one locate such properties??

Any information is welcome and greatly appreciated.

Regards,

Novski

 

[D.T.]

As far as I am aware, its not legal to make that information public in Australia. However, if you're good friends with a bank manager or divorce lawyer, then im sure you might be able to learn a couple of tricks.

*insert legal disclaimer here*

Be careful where you tread.

 

[XBenX]

true dtraeger2k - they cant legally provide that info

but if you are friendly with someone in the industry, they could always mention something off the record - not saying its legal, it would just be difficult to prove.

 

[Novski]

dtraeger2k and XBenX, thanks for your your response.

Are you aware that foreclosures are quite legal in the USA and is a common way of experienced investors purchasing property at well below market value. They seem to have systems designed at openly using this method. Have you looked at their ebay site.., ebay.com - go to properties then foreclosures.

Is anyone aware of what law makes this legal in the States and illegal here in Australia??

It seems Real Estate Agents have taken a stranglehold here in Australia so that they reap maximum rewards and people are becoming more and more ignorant about what they are capable of doing without agents.

Do you think foreclosures can become common practice here in Australia? The repercussions of increasing interest rates would result in increased foreclosures which would open doors. Maybe it is just the fear factor which is keeping a lid on this method of trade becoming used.... Hence, is purchasing via foreclosures really illegal.....??

Comments, anyone....

Novski

p.s: What does it mean on this forum when a post is 'moved'?

 

[Sim]

Originally posted by Novski
p.s: What does it mean on this forum when a post is 'moved'?

That just means that the thread has been moved to a more appropriate forum. Often people will post in the general forum because they're not sure which forum it belongs in. The moderators move it to a better place.

Those "moved" links get deleted after 2 weeks - the thread is still listed in the forum it gets moved to.

 

[Andrew]

I'm no expert so don't quote me but I think I know why the foreclosure system is different
in Australia.

Here when a bank forecloses and sells a property they have to return the difference
between the sell price and what they are owed to the former owner. Hence, they must be seen
to be seeking a fair market value otherwise they could be sued by the dispossessed owner.

As I understand it in the United States there are no such provisions (correct me if I'm wrong)
so the bank runs an auction on the courthouse steps after they have been awarded
control of the property to recover any money they can.

Our system seems a bit fairer to the poor folks who just lost their home, not so great for the
property sharks looking for a good deal.

andy

 

[XBenX]

Originally posted by Novski
dtraeger2k and XBenX, thanks for your your response.

Are you aware that foreclosures are quite legal in the USA and is a common way of experienced investors purchasing property at well below market value. They seem to have systems designed at openly using this method. Have you looked at their ebay site.., ebay.com - go to properties then foreclosures.

Is anyone aware of what law makes this legal in the States and illegal here in Australia??

It seems Real Estate Agents have taken a stranglehold here in Australia so that they reap maximum rewards and people are becoming more and more ignorant about what they are capable of doing without agents.

Do you think foreclosures can become common practice here in Australia? The repercussions of increasing interest rates would result in increased foreclosures which would open doors. Maybe it is just the fear factor which is keeping a lid on this method of trade becoming used.... Hence, is purchasing via foreclosures really illegal.....??

Comments, anyone....

Novski

p.s: What does it mean on this forum when a post is 'moved'?

yes im aware of the USA system/books etc

privacy laws prevent it in aust now - but you were unable to do it previously as well im not sure whether it was part of the banking industry laws or whether it was just an industry wide common practice

 

[Jas]

Law of supply and demand.

By law, mortgagee sales have to go to auction. Real estate agents are aware of the interest mortgagee sales attract and promote them as such.

 

[XBenX]

that too

just as an aside - the economists of the forum might like to consider that the above assumes a pefect market

where market failures exists (such as barrier to information) opportunities exist to buy these properties at less than the true market value (which would occur in a perfect market)

 

[Novski]

Thanks for feedback guys!

Andrew, by putting bits and pieces together, this is what i have come to realize too, but i'm hoping such oppotunities are not completely inexistant.

XBenX, i follow your point and logic tells me this too. You seem to know more than what you are letting on... Any leads....?? Have you had any experience?

Cheers,

Novski

 

[Aceyducey]

Novski,

From the sales I've seen of foreclosured properties, they often sell for more than similar properties because people expect them to be a bargain and flock to the auctions to bid.

Australians love a bargain - even when it isn't.

ALL foreclosed properties must go to auction and be publicly advertised, so finding a deal isn't much use - you still have to pay the highest price at the auction to get it. There's also been a few court cases recently where people have successfully sued banks that sold their property for less than what they regarded as market price so banks are likely to become even more cautious not to do deals on foreclosures.

Deceased estates might be easier to chase, no legal requirements to advertise & auction these, provided you are morally happy to be a hearse chaser.

Cheers,

Aceyducey

 

[paulzag]

Actually in Qld there is some way that mortgagee sales don't have to go to auction. I don't knwo how or why but I do know I bought one.

US attitudes to real estate are quite different to Australia. That is a curse and a blessing. Foreclosures have great advertising appeal in the US but not too many people do them in say LA or NYC. There are regional variations.

In Oz we don't have a perfectly informed market. Therefore sometimes a Mortgagee Auction or Deceased Estate comes around cheaply. Normally though IMHO it is a failure of the listing agent rather than the process. The agent doesn't need to perform.

Occassionally bargains happen because the mortgagee does not want to spend ANY more money making the property presentable. I got a wonderful bargain that way once - the agent wouldn't enter the property because of the urine smell. Therefore buyers were put off too.

I have over the years attempted to get a list of all of a banks mortgagee in possession auctions. I didn't want private info just the agent's details. I wasn't successful. Normally I do another deal and the need for the list is not as urgent.

Regards

Paul Zag
Dreamspinner

 

[TheBacon]

Warning - speculation by novice follows....

It would seem to me that mortgagee auctions might follow the broader market but with wider swings up and down.

In a hot market (now) people are searching for bargains and many novice investors are around. Therefore many people go to these auctions to get a good deal.

In slow markets all properties suffer. Auctions suffer more than sales by negotiation. And mortgagee auctions suffer even more?


TheBacon

 

[XBenX]

Originally posted by Novski
Thanks for feedback guys!

Andrew, by putting bits and pieces together, this is what i have come to realize too, but i'm hoping such oppotunities are not completely inexistant.

XBenX, i follow your point and logic tells me this too. You seem to know more than what you are letting on... Any leads....?? Have you had any experience?

Cheers,

Novski

havent bought one, but when i was a bright eye'd young lad (i think that was yesterday) i did seek out info on these sales and found too many dead ends for info (much like PaulZag) and too many looning paying too much damn this boom bless it as well

 

[Pedro61]

I beleive you can go to property auctions run by councils who are reclaiming unpaid rates. They (so I'm told) auction the property, recover their rates and hand over the balance to the former defaulting owner.

Dont know much about this though.

 

[geoffw]

You can go to such auctions- but the lcal ones have been well publicised, and well attended. Apparently properties have gone for over the market value because people assume a bargain without knowing the market.

 

[XBenX]

Originally posted by Pedro61
I beleive you can go to property auctions run by councils who are reclaiming unpaid rates. They (so I'm told) auction the property, recover their rates and hand over the balance to the former defaulting owner.

Dont know much about this though.

yup, somewhere on here ive told the story about the one that got away

h5 ill do a quick search and see if i can find it

here

 

[Ross Sneddon]

Hi Novski and Others,

The reasons why it is different in the USA to Oz is the difference of ownership of land and title.

In the USA, the purchaser buys the land and all on it and under it, therefore a mortgage attaches to the land. When the land is sold the mortgage and title attached to it go with it.

In Oz the purchaser buys the title to the land but does not own the land, what is under it or above it, only the title to the land. Therefore a mortgage attaches to the title and not the land.

In Oz, if a person is being pursued by the Bank for arrears money, they know it and know it for some time. The owner may then choose to sell prior to the bank exercising its foreclosure rights. It is better for the owner to retain control of the situation and do all possible to correct the problem than to allow it to fall into the hands of the Bank.

A “friendly” bank manager, or whoever, cannot release this information to the public without the knowledge and approval of the owner without breaking the law. So if you are now gaining this type of information, it may be considered unlawful, which implies that you are not beyond gaining some advantage which becomes the owners loss. Is this fair and reasonable or are the present laws more acceptable?

Why Novski now takes a swipe at the Real Estate Agent, suggesting that from this situation the Agent is gaining some kind of benefit is beyond me. Why do you think that they have a stranglehold and reap maximum benefits from this situation? And yet, you seem to suggest that a whisper in your ear at the right time might be OK.

The General Public and Real Estate Agents must all comply with the same laws as each other.

Regards

Ross