According to a survey which David Lichtenstein presented to his students, nearly
200,000 New York citizens every month pay loan for an apartment or house, and
according to some rating, 10 percent of them barely manage to set aside money
for the loan, which often amounts up to half of their salary.
The real
number of foreclosed real estate in New York now is 411 which is a significant
indicator pointing that the situation will only get worse i.e. that number will
increase in the coming months.
We asked
the expert for investing in real estate, professor David Lichtenstein, under which conditions
is possible to buy such property, which is often sold for a much lower price
than the properties sold on the regular market. Mr. Lichtenstein explained that foreclose
occurs when the owner of the property is no longer able to pay the loan on time
according to the conditions listed in the contract signed with the bank. When
this happens the bank can lodge a claim for payment.
- The bailiff
is the persons who initiate the enforced payment proceeding in interest of
their claims or in interest of the person or bank in whose favor the procedure
was initiated. Therefore, any regular or legal person may be found in a role in
the execution creditor - said Lichtenstein.
The
investor in real estate David Lichtenstein says that any citizen can buy a
property that is at auction, with exception of the debtor, the judge or other
person officially involved in the process of selling.
- So, now
even foreigners may be customers of some real estate at auction, but such cases
are not likely to be common says Lichtenstein. The process of buying property over which enforced
payment is performed is clearly defined in the Law for enforced payment.
Auction
- Customers
can participate in the public auction for the sale of the property if they pay 10
percent of the total value of the property determined as insurance. This amount
is always a fixed and determined by the court and is published in the court 30
days before the date of the auction. Conclusion on the sale of real estate on
the same bulletin board is determined and the day when
- On the
public auction buyers bid for the property. The property will be sold to the
best bidder, which will be obligated to deposit the purchase price, minus the
amount paid as insurance i.e. 10 percent of the total value of the property.
The minimum
amount of the first public auction is 2/3 of the real value of the property.
The value
of the real estate under which the execution is carried is determined by the
court but that doesn't mean that the property will be sold under that price.
The property cannot be sold below 2/3 of its real value, explains Lichtenstein. Then he adds - If at the first auction the minimal price is
not achieved then the property goes on second auction. Sometimes the amount of
the debt can be significantly higher than the value of the property, that’s why
sometimes the amount of the debt is determined as the minimum price for selling
the property, explained David Lichtenstein.
