Following are answers to some of the most commonly posed questions regarding purchases of foreclosures.

Q. Are there closing costs when buying a foreclosure?

A. Yes: the cost of the title insurance policy and the cost of recording your deed.

Q. Will I need a lawyer when buying a foreclosure?

A. The terms are set; the lawyer will not be able to change them. Your title insurance policy is the best protection.

Q. Once you put your bid in at the foreclosure sale, can the homeowner still get the property back before you put down the balance?

A. No. Once the sale goes forth, it is final.

Q. I’m concerned about the permanence of the foreclosure sale I’m contemplating. Doesn’t the former owner have the right to buy the house back within a year?

A. That’s what’s known as a “right of redemption.” Such rights do not exist in foreclosure sales, although they do in tax sales or sheriff’s sales.

Q. How do you get people out of the property if they continue to occupy after the sale? Won’t the bank take care of that?

A. The bank will not handle this for you. This situation is similar to a tenant holdover conflict in which a landlord wishes to eject a tenant from a rental property. Offer move-out cash, “cash for keys.”

Q. Can I get a GI mortgage on a foreclosure?

A. Not on a foreclosed property bought at public auction. Such sales are “all cash,” although you might be able to get a GI mortgage on a a bank-owned foreclosure.

Q. Why shouldn’t banks look forward to selling out properties with small mortgages so they can make money on the sale?

A. Real Estate Owned is an item banks would rather not have on their financial statements. They’d much prefer to have these properties sold to third parties. Banks can collect only the sums legally due them. They do not share in any overage that may arise from the property at the Trustee Sale.

Q. I’ve gone to a house that was in the process of being foreclosed, but the occupant wouldn’t let me in to see the place. How can I get a look before placing a bid?

A. You may be limited to an exterior assessment. On the other hand, if the house is vacant, you can always try calling the bank.You’ll probably get in for a look; after all, the bank wants to sell the property.

Q. Where can I learn about properties being foreclosed?

A. If there is no publication in your area that covers these matters, you can go to the county courthouse where the notices are posted.

Q. Where are foreclosure sales held?

A. The notice of publication will indicate where the sale will be held. Typically, sales are held on the steps ofn the courthouse. You must be prompt in arriving at foreclosure sales.

Q. Let’s assume that I am the successful bidder at the sale. Am I obligated to pay up any other creditors of the party being foreclosed?

A. Only if the recording of their claims precedes the recording of the party who is doing the foreclosure.

Q. Suppose that a second mortgage is being foreclosed and that I win the bid. Do I have to pay up the first mortgage completely?

A. No, although if it is in arrears you will have to bring it current. You assume the responsibility for it when you buy the property at the foreclosure sale.

Q. Will the bank fix the neglect of the past owner?

A. The bank won’t do anything to property it doesn’t own except board it up to prevent vandalism. If you buy a previously foreclosed property from the bank’s REO, that’s a different story. In such a case, the bank owns the property. You can ask for anything. The answer you get will depend on the individual circumstances surrounding the property.

Q. If a property is being foreclosed, could I arrange to buy it before the sale from the owner and continue his mortgage?

A. If you could get an agreement for a deed from the homeowner, you could talk to the bank about reinstating the mortgage and assuming it.

Q. I’d like to simplify things. Is there a rule of thumb to help me determine what percentage of value I should pay for a foreclosure.

A. No. Too many variable-- condition, salability, location, financing, and taxes, to name a few--- come into play.

Q. If the foreclosed property has improvements that were never finally inspected and here are no certificates of occupancy for them, will the bank furnish these certificates at the sale?

A. No. This is one of the perils of buying a foreclosure. In order to get a permanent mortgage loan on the property, you will have to get certificates. This is usually not a major setback, but you will have to do some of the legwork and handle the minor expenses associated with the process.

Q. What are the rights of tenants under a lease?

A. If the lease predeces the date of the mortgage being foreclosed, the tenant stays. Leases made after this date are invalidated by the foreclosure process. Consult your attorney for more details; remember that local laws will vary when it comes to extricating tenants from property to which you have a legal right to.

Q. I’ve heard that the real estate brokers have an inside track on the good foreclosures. Is this true?

A. Foreclosure sales are conducted by a referee who is assigned by the court. The bank has no say in the selection of this person.

Q. If the prior owner didn’t pay the taxes on a foreclosed property, does the successful bidder have to pay them?

A. No. If the taxes weren’t paid, the county could sell the property out from under the bank’s mortgage lien. Banks pay the amounts due to municipalities and sell the property with all tax payments current.

Q. How does a tax sale differ from a foreclosure sale?

A. When the public authorities offer a property for sale to satisfy a tax lien, the successful bidder buys the right to own the property if the property owner does not repay him. This is not the case at a foreclosure sale.