Foreclosure in Los Angeles>Question Details

Voices Member,  in

Pre-foreclosure, Foreclosed vs REOs......

Asked by Voices Member, Wed Jun 6, 2012

We are first time home buyers, we are looking to find the perfect first home so we prefer to look for the condo ourselves...however, we are hoping to get it at a low price, should we start following pre-foreclosure homes, Foreclosed homes or REO homes? We need a Real Estate Agent who specializes in these type of things.

Help the community by answering this question:

Answers

23
You can check on http://www.ishortsales.com

They have short sales, preforeclosures, foreclosures and agents who specialize in them.
0 votes Thank Flag Link Fri Jun 15, 2012
Hello Irene,

Congrats on deciding to buy a home of your own! Your first step is do get pre approved for a mortgage loan.

Once you secure loan approval you will need a dedicated buyer's agent. One who is not too busy to dedicate the time needed to work with a first time buyer.

Buying your first home can be fun, stressful, hard work , and rewarding. Your agent will search for homes for you, you do not have to follow homes if you have an agent working hard for you.

Keep in mind REO homes are sold AS IS for the most part. If you do not have cash reserves and time for repairs, you may want to shy away from REO homes. Pre Foreclosed homes are not available for sale and some of them to not make it to the open market as they may be sold at "ALL CASH" trustee sales.

Best of Luck to You,
Kawain Payne, Realtor
0 votes Thank Flag Link Wed Jun 13, 2012
Best to check agent's ratings and testimonials like on Trulia and other sites.
0 votes Thank Flag Link Wed Jun 13, 2012
Prices haven't been lower in years, Mortgage rates are at record lows, inventory is beginning to dwindle....I'd say if you paid Full asking price for any home or condo today you would be getting the best of all worlds. If mortgage rates go up 1%, that is an increase of 25% so don't be too picky in finding that "perfect" house. Remember any house you buy will become your families home, and that is what will make it perfect!

here is a blog about real estate in general. http://blog.house-guy.com/category/buying-a-home-2/
0 votes Thank Flag Link Wed Jun 13, 2012
Pre foreclosure homes are also known as Short Sale properties and although the legislation has changed to speed up the process, it still can take some time to purchase one of these properties and it will also tie up your down payment. Your best bet is to speak to a loan officer and realtor who are experienced in working with both first time home buyers and "distressed" properties. As Tom mentioned below you do not want to purchase a fixer upper which will cause you grief and aggravation. With so many homes out there, there is no need to make more work for yourself and keep in mind if rates go up 1/4 point, it could mean an extra $15,444 in interest on a 300,000 loan over the course of 30 years, so it might make more sense to buy something slightly higher now and take advantage of the historically low rates.



Regards,
Marco Gomez
NY State Licensed Associate Broker
Keller Williams Landmark II
Mobile: (917) 734-2012
marco.gomez@gmail.com
0 votes Thank Flag Link Wed Jun 13, 2012
Lowest price and Perfect home for a first time home buyer in many cases is NOT THE SAME.

The lowest prices in many cases are NOT pre-forcosures, but Government REOs, HomePath and HomeSteps homes for sale can be very good value.

Your first step, is to find a local Realtor who has experience working with First Time Home buyers, not foreclosures.

Condos are the hardest to get financing for and many for forecloses financing are also not possible. or too much work needs to be done. Rent and watch the movie "The Money Pit." if you are thinking about a fixer upper for a first time home.

just because the PRICE is Low, does not mean it is a good deal for a First time buyer.

Good Luck
0 votes Thank Flag Link Wed Jun 13, 2012
You can go to http://www.ishortsales.com

It is a list of foreclosures, short sales and preforeclosures and their agents.
0 votes Thank Flag Link Tue Jun 12, 2012
Hi Irene:

If you are a first time homebuyer, many of the foreclosed properties may not work for. You are better off looking for a home that you are able to move right into, that needs very little or no repairs. Your lender may require this as well.

When you look at foreclosed properties, keep in mind that they are bank owned, and that the pervious owners may or may not have taken care of the property, so the property may need some work. Most banks sell these properties in "as-is" condition, whereas, they will not do any repairs nor give credits for work done. You may get lucky and find the gem that needs little or no work...these are rare. Foreclosure properties also will be listed at market price...so you may not get any break on the price because it is a foreclosure.

So, it may be in your best interest to look for properties that are in good, move-in condition, not just foreclosures.

If I may be of assistance to you, please feel free to contact me directly.

All the best and Good Luck!

Kat Becker, Realtor
Prudential California Realty
katbecker@hotmail.com
0 votes Thank Flag Link Mon Jun 11, 2012
Hello Irene,

Following pre-foreclosures will not yield you any real results. It can take months for them to actually become REOs. Besides some homeowners are successful in getting out of pre-foreclosure.

My advice to you is to get yourself pre approved for a mortage, then find yourself an agent for buyer representation.

Keep in mind with condos you will have to pay a monthly HOA fee in addition to your monthly mortgage payment. Also make sure to have your agent verify the condo complex you are interested in is FHA approved if you wull be using FHA financing.

Best of luck to you.

Kawain Payne, Realtor
0 votes Thank Flag Link Fri Jun 8, 2012
If you were my kid I would tell you not to limit yourself to buying someone else’s train wreck. If you don’t listen to my advice, make sure you purchase owner’s title insurance, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
0 votes Thank Flag Link Fri Jun 8, 2012
Here's list of LA foreclosure prorerty http://www.indexpost.com/foreclosed-homes/california/los-ang… - click on the interesting one and you'll get agents information
0 votes Thank Flag Link Fri Jun 8, 2012
Hello Irene,

As first time home buyers, it's easier to buy a house or a townhouse (but not a condo physically looks like a townhouse, but it is legally a condo). The reason is you'll be buying with financing...and banks don't finance all of the condos - only those that meet their guidelines.

For FHA financing - check out what condos in your area are FHA approved.
Go to http://www.FHA.gov - put there your state and zip code.
For Fanny Mae (conventional) financing - you'll need at least 10% down - go to EFanny.com.

There are Fannie Mae and Freddie Mac foreclosure programs that allow to buy in the buildings
that are not otherwise financable. The programs are Homepath and Homesteps - one their namesake websites.

An experienced agent will help you in your search.
Best for short sales - CDPE designated agents - you can find them on http://www.CDPE.com.
CDPE stands for Certified Distressed Property Expert.
For foreclosures - Certified REO Specialist.

Don't overlook the normal sales though, where sellers will respond quickly and often will be willing to negotiate. Foreclosures are priced to "tease" and often cause a bidding war. Short sales are very complex and not all get approved, while lasting way too long....

Best of luck and hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Thu Jun 7, 2012
As first time home buyers, you definitely need a Realtor. They know more than you at this point. Foreclosed homes are the same thing as an REO home. Pre-foreclosures are short sales.

Pursuing these is not necessarily the best way to get a low price. Distressed homes tend to get multiple offers, usually pushing the sales price OVER the list price. Your ability to effectively buy in this arena will also be impacted by how much you have to put down. Investors and others with large cash deposits often win these bids leaving the average Joe out of the mix.

Within the past 18 months, I've gotten the best prices for my clients with an old fashioned traditional sale. Banks don't tend to negotiate, sellers do.
0 votes Thank Flag Link Thu Jun 7, 2012
Hi Irene,
First I would like to say that Nancy is right, but most pre-foreclosure homes or short sales are on the market with Realtors because sellers can't do it themselves and banks are paying realtors fees so why look on your own? Sellers pay commissions so you can get an agent to help you find a property... They do much more then just find a property, they write offers, check title, and the foreclosure homes are rarely open to the public, you need an agent to get in. So looking on your own?? Are you pre-approved for a loan?
And here you are on Trulia, asking REALTORS what to do?

FIND an area specialist, that would be your answer, with experience.
0 votes Thank Flag Link Thu Jun 7, 2012
Irene,
I strongly suggest you have a buyers' agent help you. This is a major investment so use a professional . Plus in most cases they are paid by the Seller. It is not just locating a home the meets your needs but assessing its value and negotiating and setting the terms plus steering you through the maze of inspections and due diligence. Penny wise, pound foolish. It's not even your penny, Don't do it!
0 votes Thank Flag Link Wed Jun 6, 2012
Hello Irene, and thank you for contacting Trulia for your real estate needs and questions. Buying your first home is an exciting experience and you want to ensure you work with a real estate professional who will work and look out for your best interests. Finding a home at a low price is not impossible and depending on your pre-qualification - you want to ensure you buy within that amount.

Homes are usually priced at market value and some are priced in "as is" condition, so there is opportunity to buy at a low price. Keep in mind, with interest rates so low, turnkey homes are sold very quickly, requesting little to no closing costs. It is important to know what your needs are and what you are willing to pay for in a particular home. A pre-foreclosure is a short sale home, foreclosed home is an REO home - the market is very low with REO homes right now.

Selecting the right agent is important, interviewing is your best bet. Should you need to interview agents to assist you with your first home, Id like to be an agent you interview. I have extensive experience working foreclosed homes and I am very knowledgeable of the current foreclosure market. I can assure you I will represent and guide you with the purchase of your first home.

Best of luck, Nancy
626-893-6070
0 votes Thank Flag Link Wed Jun 6, 2012
Let's clarify the basics: a foreclosure/REO is not necessarily a better deal. In fact, you are at greater risk because many standard sale protections are eliminated. What do you mean--prefer to look ourselves. An agent who understands your needs and budget should help the process be faster and easier, and save you money by providing good advice (and it doesn't come out of your pocket). Why not speak with a few agents and learn how they work. You may be pleasantly surprised.
0 votes Thank Flag Link Wed Jun 6, 2012
What we want are very specific. Location, look and feel of the unit, sq. footage, etc...Ive been looking online, I was thinking that when I see what Im looking for, then Id get the Agent. Am I doing it the wrong way?
Flag Wed Jun 6, 2012
Actually, some pre-foreclosures are for sale. They would be listed as short sales. Short sales are not usually a good idea for first time home buyers because of the frustrations and uncertainties encountered in them.

There is absolutely no reason for you to try look for yourself when a Buyers' agent costs you nothing, and can very often save you a lot of time and give you the guidance you need while protecting you from the pitfalls you might otherwise encounter.

Just make sure you do not sign a Buyer's agreement which locks you into one certain Agent, in case you decide you picked the wrong Agent and want to change. Many good Agents are willing to work with you without a Buyers' agreement.
0 votes Thank Flag Link Wed Jun 6, 2012
I think what's frustrating is that some agents have contacted me via the email list I logged onto, but they just send me the same listings Ive already seen months ago. If this is that's everything out there, then it's hopeless for us. I would like an Agent to send me something that Ive never seen before or hundreds of people haven't thread through yet. Is that Mission Impossible?
Flag Wed Jun 6, 2012
I show and sell foreclosure and short sale properties all the time, in quite a few areas of Los Angeles, and they're marketed through our multiple listing service. Find out what price range you're in by talking to a good lender who is local to L.A., determine which areas of town your price range dictates, then work with an agent who is good in those areas. If you don't have a lender, any of us can point you to good ones.

Diane McDonald
Prudential California Realty, Los Feliz
20 Years of Sales and Service
323-236-4369
http://www.facebook.com/thefunkybungalow
0 votes Thank Flag Link Wed Jun 6, 2012
Dear Irene:
I ussually work in several areas like San Gabriel Valley, El Monte, Baldwin Park, West Covina, La Puente, Azusa, Pomona, Ontario, Rancho Cucamonga, Fontana, Colton, Mira Loma, Corona, San Jacinto, Riverside, Moscoy, Hesperia, Victorville, Lancaster, Palmdale, Chatsworth, Reseda and towns around. Please give me a call (626) 825-9444 and Get More: "Maximum Service, Maximum Results" Alvaro Lozano CA DRE LIC 01360485. Thank you
0 votes Thank Flag Link Wed Jun 6, 2012
Pre-foreclosures are not for sale, so there is no reason to look at those. Foreclosures and REOs are the same thing. They are usually good value but often can require a substantial amount of work to make livable and sometimes are impossible to finance because of poor condition. Some of the best deals I have seen recently are not foreclosures at all but are just regular sales priced well. If you want something that is move-in condition then foreclosures are not your best bet. If a great value is the most important to you then it's not a bad idea. Best thing is to not limit yourself and look at all your options. There is no reason to JUST search for a foreclosure. It's not the only type of "deal" you can get. Also depending upon what area you are looking in there may not even be any foreclosures to consider. Short sales are much more prominent and can also offer a good value but you have to have patience to wait for a much longer time to get lender approval. This will usually take anywhere from 45-90 days.

Depending upon the area you are interested in I'd be happy to assist you further. I have worked with many many first time buyers and the process of buying a home requires a careful and diligent buyer's agent especially if you have never been through the process. Please feel free to contact me anytime.

Sincerely,
Jeffrey White
323-251-2296
0 votes Thank Flag Link Wed Jun 6, 2012
Depends on how soon you want to be in your new home. If time is not an issue, short sales. If you want something rather soon and can make an offer then REO's but best to be ready. Get pre approved by a lender, know your credit score and debt to income ratio.
Good luck
0 votes Thank Flag Link Wed Jun 6, 2012
I see these questions on Trulia all the time. All of the sale types you mention as well as regular sales are usually represented by Real Estate agents and posted in the MLS. A good buy doesn't necessarily need to be distressed to be the "perfect home" you are seeking. Be open to seeing all types of listings and there's really no need for an agent that specializes in distressed sales. You may want to target an agent that specializes in the area/neighborhood you are looking though. You should also seek an agent that communicates with you well and understands any particular needs you may have with financing, schools, work commute or other factors.

While many distressed homes may appear by price to be the "low price" there are other factors such as deferred maintenance or other repairs that sometimes are difficult to achieve in the negotiation process on those type of sales. In pre foreclosure (short sales) the investor will rarely pay for the delinquent condo HOA dues so while the purchase price may appear low, there may be costs that you the buyer will need to pay in order to close.

I'd just suggest that you be open and try to find the best property you can within your budget.

Please let me know if I can help with any other answers. I know a number of great agents in the Los Angeles area that may be a good fit for you!

Byron Lohman, ABR, CDPE, SFR
Prudential CA Realty
DRE# 01272085
byron@byronlohman.com
0 votes Thank Flag Link Wed Jun 6, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer