Arthur Husk/ Bob Wood Realty
 

5 Tips for Buying a Foreclosure

 

Get prequalified for a loan and set aside funds, and you’ll be ready to purchase a foreclosed home.

 

When selling a foreclosed home, set a price well under market value so the home will sell quickly.

 

When lenders take over a home through foreclosure, they want to sell it as quickly as possible. Since lenders aren’t in the real estate business, they turn to real estate brokers for help marketing their properties. Buying a foreclosed home through the multiple listing service can be a bargain, but it can also be a problem-filled process. Here are five tips to help you buy smart.

1. Choose a foreclosure sale expert. Lenders rarely sell their own foreclosures directly to consumers. They list them with real estate brokers. You can work with a real estate agent who sells foreclosed homes for lenders, or have a buyer’s agent find foreclosure properties for you. To locate a foreclosure sales specialist, call local brokers and ask if they are the listing agent for any banks.

2. Be ready for complications. In some states, the former owner of a foreclosed home can challenge the foreclosure in court, even after you’ve closed the sale. Have your attorney explain your state’s foreclosure process and your risks in purchasing a foreclosed home.  Ask your agent to recommend a real estate attorney who has negotiated with lenders selling foreclosed homes and has defended legal challenges to foreclosures.  Set aside as much as $5,000 to cover potential legal fees.

3. Work with your agent to set a price. Ask your real

estate agent to show you closed sales of comparable homes,

which you can use to set your price. Start with an amount

well under market value because the lender may be in a

hurry to get rid of the home.

4. Get your financing in order. Many mortgage market

players, such as Fannie Mae, require buyers to submit

financing preapproval letters with a purchase offer. They’ll

also reject all contingencies. Since most foreclosed homes

are vacant, closings can be quick. Make sure you have the

cash you’ll need to close your purchase.

5. Expect an as-is sale. Most homeowners stopped maintaining their home long before they could no longer make mortgage payments. Be sure to have enough money left after the sale to make at least minor, and sometimes substantive, repairs.

Although lenders may do minor cosmetic repairs to make foreclosed homes more marketable, they won’t give you credits for repair costs (or make additional repairs) because they’ve already factored the property’s condition into their asking price.

Lenders will also require that you purchase the home “as is,” which means in its current condition. Protect yourself by ordering a home inspection to uncover the true condition of the property, getting a pest inspection, and purchasing a home warranty.

Be sure you also do all the environmental testing that’s common to your region to find hazards such as radon, mold, lead-based paint, or underground storage tanks.

 

CHECK BACK SOON FOR MORE STRATEGIES!

 

LISTEN TO MY MUSIC AT

http://artistserver.com/httpwww.artistserver.comskyrider

 

 

 

 

 

 

                                                                             

 

 

                                                                         

 

 




 

         
                                                     

 

 

 

 

 


 

 

 

 

      
   

 

 

Featured Properties
© Copyright 2007-2012, Georgia MLS. All rights reserved