Foreclosure in Nevada takes place via a trustee sale. This article discusses the foreclosure process in general, and specifically trustee sales in Las Vegas. Foreclosure is not a one time event, it is a process, and you must understand this process thoroughly if you are considering investing in distressed real estate. There are two main foreclosure methods: foreclosure by judicial foreclosure and foreclosure by trustee sale. The latter in the common method in Las Vegas.
When a homeowner purchases a property the county issues a sheriff’s deed that the trustee holds in trust until the mortgage is paid in full. If the homeowner defaults then the lender can ask the trustee to initiate foreclosure, with the trustee sale being the final step in the process:
- When a homeowner is late by 60 days or more in their mortgage payments the lien holder/bank records a Notice of Default with the county and sends that same notice to the borrower
- The homeowner has 90 days to reinstate the mortgage according to the terms of the lender or they will receive a Notice of Sale
- The Notice of Sale is recorded at the County Recorder’s Office and sets the date for the Las Vegas Trustee Sale
- The Trustee Sale takes place approximately 30 days from the date of the Notice of Sale. During this period the homeowner can reinstate their mortgage
- After the sale, the trustee transfers proceeds to the lender as payment of the loan
- If there are no third party bidders for the property at the Trustee Sale, or if the minimum reserve amount is not met, the property will usually revert back to the bank and become an REO. This REO will then be marked up and placed for sale through a real estate broker contracted by the bank
Tips for foreclosure bidding:
- Before purchasing via a foreclosure/trustee sale then you should attend the auction on multiple ocassions to become familiar with the process
- Unless you are an expert you should not purchase junior liens: there are times when you can use a junior lien to control senior liens, but this is not for the faint hearted
- You will need to pay by casheir’s check so you should take multiple checks in different increments
- Set your maximum bid before you go, and don’t get caught up in the excitement of trustee sales in Las Vegas and go above it
Once you have acquired the property you may have to deal with an eviction. The best way to handle this is by offering an incentive package for the evictee to leave. Failing that you will need to file with the district court to handle the eviction.
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