Profits on foreclosures are not easy
The surge in foreclosures offers the perfect opportunity to find bargains. Guess again.
Local real estate agents learned that sobering lesson this week during a packed workshop on the nitty-gritty of buying foreclosed properties.
The Thursday session, sponsored by the Passaic County Board of Realtors, wasn’t one of the get-rich-quick seminars now blanketing cable TV. Speakers instead explored the hard realities of a process that ultimately favors the banks, not individual buyers.
“It’s very complex,” said Fredric F. Azrak, a Pompton Plains lawyer who spoke at the session. “If it was easy, we would all just quit our jobs and do that.”
About 250 real estate agents attended the session in Wayne. It was by far their most sought-out workshop in the board’s recent history, said Mary Ann Sgobba, a Totowa real estate agent.
Foreclosure is the process whereby a bank repossesses a property after a homeowner fails to make monthly loan payments. Banks must petition a judge to foreclose, as in other civil cases. Public auctions are held at county courts.
Two months of missed loan payments can start a foreclosure. But it’s a long, heavily regulated process, especially in New Jersey.
That may be bad for those looking to profit from foreclosed properties. But it gives homeowners additional safeguards.
“(The government) doesn’t want to throw people out on the streets,” said Azrak, a lawyer for 32 years who advises clients in foreclosures.
Still, the topic has come into vogue because of the volume of people now in foreclosure. In the first half of 2007, more than 16,000 foreclosure complaints were filed in New Jersey, according to the state Administrative Office of the Courts. That’s close to the total for all of 2005.
Private companies have taken note, showering cable TV stations and the Internet with notices for investment opportunities.
“I’ll be flipping through late night TV, and there are two or three of these shows at any time,” Sgobba said.