I will response in 9 easy steps:
1-Find a Realtor that has the heart of a teacher, not only he needs to have the SFR designation (Short Sale and Foreclosure Resource) but also traceable experience in closing foreclosed homes.
2-Find a local lender, you need to get pre-approved for your loan if you are not paying cash. Step 1 and 2 go hand in hand. I prefer local lenders because the communication with the loan officer is more efficient and most of them have local processing of your loan in house. Be sure you sit down with your lender and discuss which financing option is the best one for your situation.
3-Start house shopping! A good Realtor will be able to provide you with an Automated Listing Notification tool where you have access to all the properties for sale, you can search, you can get notified when new properties hit the market as long as they match your search criteria, you get notified of price reduction of properties you are following, sold information about other properties so you know how much people are paying for certain properties and more.
4-Once you identify the house you are buying, make a reasonable offer. Prices are already low, and there are properties out there receiving multiple offers. The more reasonable your offer is the better chances you have to obtain it. Be aware of the condition of the home, foreclosures are sold as is; it is very rare where the bank owner has been able to make any repairs. In case you are getting FHA financing, be sure your Realtor can tell you if the property you are buying meets the guidelines for an FHA loan. Thatâ€™s one of the reasons you need to work with a Realtor that has experience with foreclosures. I will also add that you need to make an estimate of how much money you need to spend in case you need to make some repairs or improvements to the property.
5-Hire a Home Inspector. This is a very important step, be sure you have a home inspection. This is one of the contingencies you have working in your favor. Be sure you hire a reputable home inspector; there are some really good ones in the valley. Some offer limited warranties on the items they inspect.
6-Be sure you stay communicated with your lender, be sure to provide documentation to your lender as needed and in a timely manner.
7-Once the house inspection has been completed and the contingency has been removed, by this time your lender had already order an appraisal on the property. In order for this contingency to be satisfied, the value of the home has to come in at least at the purchase price of higher.
8-Close the loan! Or the closing date. Take possession of the property.
9-There is other mini steps in between, but in a nutshell these are some of the things you need to know. My recommendation that I want to make, be sure you stick with the house and the financing you are getting. There is nothing worst than a buyer looking at other homes once the buyer has a contract on a house or checking other financing options. Thatâ€™s why step 2 and 3 are very important and where most of your time will be spent.
If you need more information of the Automated Listing Notification system, I can provide you with some information. Feel free to contact me.
First, contact a lender, maybe two. If you would like a referral, I have an excellent lender I use for 100% of my buyers. After you find out how much you are approved for then you can start house hunting.
Second, contact a realtor. Actually, everything happens simultaneously, but don't start looking at homes until you know what you qualify for. Don't waste time. Trulia is a great way to find realtors. Interview a few, find one you connect with and trust and start having e-mails sent to you. This is the best way to start. Shop on the internet, then start driving around.
If you would like any help, please contact me. I can review the entire process from start to finish.
Make sure you are compatible with the Realtor and the lender and not intimidated by them! Preferably, they will work as a team to make your purchase go smooth and get you the best rate and price!
There is a complete new Realtor Certification dealing with this topic so it is impossible to address it in 5,000 charactoers or less. I am please to have this Short Sale and Foreclosure Resource Certification and am glad to try to help!
Many of the processes it takes to buy a "foreclosed" home would be similar to buying a "traditional" home.
You need to determine what area of the Treasure Valley (Boise area) you want to live in. Then you need to determine what your "dream home" would consist of as far as ammenities are concerned (size, style, age, lot size, minimum number of bedrooms, bathrooms, etc.,)
Then we would compare that dream home price range to your budget to make sure it is a "fit". There are so many types of loans available (even today) that we would then try to get you the best one for your needs and desires. For example, if you don't have a down payment, we might need to look at niche loan programs, or maybe even unique city programs and grants!
I even know of some programs that will custom purchase homes to fix up and resell to you outright or sometimes on lease purchases! There are lots of options available and no one lender can do them all!
I strongly suggest taking a first time homebuyer class since they can earn you discounts on some mortgages and they also help you learn the process.
You might even consider building a home right now since some of the builders have acquired lots at such a great discount due to the economy that they might be able to meet or beat foreclosure pricing and your new home would come with your choice of paint and flooring and a new warranty instead of the concern about buying a home someone may not have had the ability to financially maintain (i.e. did they blow out the sprinklers last fall, etc.).
I have been a local Realtor here in Boise for 19 years so I am here to help answer questions. I would love to put this experience to work for you!
Jim Paulson - Owner/Broker Progressive Realty Corp.
My best advice is to sit down with your fiance and each make a list of the top 10 amenities that you want. Then look at each others list and pick the top 5 things that you both want. After you have that list contact a mortgage broker that you trust to get your financing in order make sure they ask for your tax returns and can interpret them too, that will save you a lot of time. Once you are fully approved seek the advice of a real estate consultant not agent. The difference is that a consultant will sit down with you ask you questions and listen vigilantly to your answers then determine how they can help you. Once you have chosen a real estate consultant have them pull every foreclosure, bank owned home and trustee sales home. then once you see a home you like go look at and if you like it write an offer asap, the market changes so fast you don't want to miss out.
Your Friend in Real Estate
When banks foreclose, they generally hire realtors to list the property for sale anyway, since they are not prone to dealing with individuals buying foreclosed homes to the bank. The bank doesn't have the staff or the experitise to market properties which is why they go through realtors.
The realtor you choose can (should) research the history of the home, how much it foreclosed for, what the current fair market value is compared to recent sales and other market conditions.
Additionally, your realtor can (should) guide you through the buying process, including advising you to speak to ,mortgage lenders so that you can be preapproved for a loan and so that you will know your buying power.
Depending on your credit history and your down payment, you may qualify to do an FHA loan which means a down payment of as low as 3.5%.
Don't limit yourself to buying a foreclosed home. Oftentimes, many bank owned properties are trashed and looted...and although it may sound attractive to buy a home in such condition, you may be biting off more than you can chew because repairing the property may involve more cash and more time on your part. I've seen where arguments cause strains on a couple's relationship.
Bottom line: start talking with a realtor and a lender...let their expertise guide you.