The condition of these homes will very and is an important factor to note when purchasing from a bank. The banks often advertise these for sale as-is. I have had buyers using both VA and FHA loans successfully purchase REO properties.
May not have utilities on and that must be addressed for inspections
Banks require a number of addendum's to the Delaware Agreement of Sale
S. Walt Simpson
Keller Williams Realty
Get house at a reduced price
Most banks will pay closing costs
Some banks will make repairs
Clear title (Homeowner Association fees paid up, etc.)
Home probably needs work, may not be in move in condition.
Don't assume anything - ask before someone tells you they won't - it's part of the negotiation process. The as-is addendum doesn't always mean "as is".
Foreclosures are an excellent investment as are short sales. The biggest con with short sales is the time it takes for the bank to approve your offer.
If you have any other questions, feel free to give me a call at (302) 540-5373.
If you want to buy a pre-foreclosure, which is a house that the bank has started the foreclosure process on, you have two options. If the person that owns it has listed it for sale you can make an offer just like any other house. You submit a purchase offer agreement with a ernest money deposit. The seller can accept, reject, or counter. Now if he is selling it for less than he owes the bank, then it is a "Short Sale". This means the bank must agree to let the seller, sell the home for less than they owe the bank. This process takes from 4-6 months. In the end, the bank can still say "no" and foreclose on the house. The other way to buy the house is to bid on the house when the sheriff sales the house at auction. You will need cash to do that because you can't get a traditional mortgage to buy a house at the auction.
If you are not buying the house cash, you will need a mortgage so you will need a pre-approval letter from a mortgage company in order to submit a contract to buy a house. If you need help getting pre-approved or have more questions, feel free to call me at 302-703-0727 Office or 302-588-3665 Cell.
You may also want to attend the next First TIme Home Buyer Seminar on November 21, 2009 at The Christiana Hilton Hotel in Newark, DE. There are two sessions, one from 10 AM till Noon and again from 1 PM till 3 PM. You can call 302-588-3665 to register or send an e-mail to DelawareMortgages@yahoo.com
John R. Thomas
Certified Mortgage Planner
Primary Residential Mortgage, Inc
42 Reads Way
New Castle, DE 19720