Hell Senevi
The answer that Grace gave you is "spot on." Work with a realtor who has had short sale and reo experience. We'd love to help you to find your dream home. Certainly with the extension of the tax credit and the fact that some existing homeowners qualify for a tax credit, makes this an ideal time to buy. Contact us if you're not working with a realtor yet! http://www.swanrealtorgroup.com

Senevi

Foreclosure properties are listed on the mls just like all other homes, or your can buy them at the foreclosure auction. The foreclosure auction takes lots of study and patience on your part and doesn't always pan out the way you think.

The best way to buy a foreclosure is to watch everyday what is coming on the market in the area you like. These properties usually have multiple offers on them very quickly, so you need to be the first to get your offer in.

The best buyer for a bank is someone who is going to purchase the home as their principle residence and has lots of money to use as a down payment. The 2nd best buyer is an Investor who has cash. FHA buyers are the next category, and lastly investors who do not have cash.

These properties typically need some work to be done to them. What that work is varies greatly, some only need cosmetic work, and others need complete remodels. Banks can also take there time answering your offer because they don't work like a typical seller. So buying bank property takes more patience on a buyers part. Its not as bad as buying a short sale but can still be a frustrating process.

If you need more help looking into the whole process let me know and I'd be glad to walk you through it.

Take care,

Daniel Herron
720-323-9178
danielherron@kw.com

Hello Senevi and thanks for your post.

With the exception of slightly more "hoop jumping" on the part of the buyer, buying a foreclosure or "bank owned" property is not much different than purchasing a home from a private seller. The only real difference is the wording and requirements within the purchase contract's "Addendum" often attached by the bank. Typically, however, foreclosure transactions are often "as is" (meaning the bank expects you to accept the home in its current condition without their assistance in repairs), made only to prequalified buyers (often the buyer is required to prequalify with a specific lender) , not available to FHA purchasers, and subject to specific time-tables after acceptance of the purchase agreement (for example, many banks want all contingencies removed in 7 days after acceptance of the purchase agreement).

While many may encourage you to enter the real estate market without a Realtor, I would certainly caution against it especially in purchasing short-sale or REO (bank owned) properties. Working with a Realtor who possesses foreclosure transaction experience will give you the best chance to "package" an offer that is acceptable to the bank, while also avoiding the pitfalls that can trigger monetary penalty clauses or even jeopardize your earnest money deposit.

For more information about specific details of foreclosure home transactions in your neighborhood, contact a qualified Realtor with expertise in foreclosure home sales and purchases. Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
San Jose, CA

The best way is to work with a buyer's agent who will assist you in finding the homes and making the offers. You can also buy them at auction, but I have no advice on that procedure.