Kris, Home Buyer in 92507

Is purchasing a forclosed home more difficult than a regular home purchase?

Asked by Kris, 92507 Tue Jul 19, 2011

? Some of these "Forclosure Bargains" appear to be a too good to be true (a home for only $36,000)...is there a catch??

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8
When buying a foreclosed home it is usually sold as is and extensive repairs may be needed. Chances are investors have already looked at the property and determined rehab value, hence many offers are submitted and the bidding begins. Owner occupant’s usually have an advantage if they act fast and have their paperwork in order as they usually get a 15 day first look at properties. In our area of the country “flippers” usually make 10-15% on an investment purchase. My advice to you, until you become a professional in the market stay away from short sales it is a very frustrating process. Also hire a full time agent with skills at making offers on bank owned properties, interview at least 3 agents and sign a 1 day buyers agency agreement with all 3 have each show you properties on 3 different days then comment long term to the agent you think will be best able to assist you. There are some very skilled agents in the market place that can really help you through the process. Many have a license but few hold the skills that will save you money and ensure a good transaction in the REO arena.
0 votes Thank Flag Link Mon Aug 29, 2011
Getting a loan on these properties is a little bit different than "traditional" financing, but if you know where to look...you can get some really good deals on properties that others are afraid to touch. These lenders and seller's often have special rates and incentives to pick these up for either a personal property or even an investment property with potential profit. Try www,homepath.com for a list of lenders and properties. Hope that sheds some light. Happy Hunting :)
Web Reference: http://www.myreoflip.com
0 votes Thank Flag Link Mon Aug 29, 2011
I think you are looking at data that houses are being foreclosed and that is the amount they could be in arrears. Not sure... You know the old saying... If it sounds to good to be true.... It probably is. Find a Realtor in your area to sit down and discuss what you are looking at and why it is. Then the Realtor can give you a list of homes that are currently on the market and you will have a more reality based understanding of the pricing. Pricing... whole different story, list price does not mean selling price in most of the cases. I have blogs on the subject as well as many others I am sure. Good Luck!!!

Kindest Regards,
Dianne Hicks
Web Reference: http://www.di4homes.com
0 votes Thank Flag Link Wed Aug 17, 2011
Interview experienced agents from your region skilled in bringing forclosures to settlement & find one with whom you have good communciation, you will need professional guidance.

Forclosures tend to be more laborious to get to settlement, so patience is required, as is the realization that houses need care and upkeep. A home that has had a cash poor owner may not have received regular upkeep and some systems may be in disrepair, you must consider how this affects your investment, and your idea of a bargin.
0 votes Thank Flag Link Wed Aug 17, 2011
Your real estate agent has the resources and should be your best answer, based on their agency obligations to you.
0 votes Thank Flag Link Wed Aug 17, 2011
Yes, there is usually a catch if the price seems very low for the area. If the price for the $36,000 example you mentioned is within the Riverside City limits, this is no doubt some kind of teaser ad which is meant to motivate you to call the advertiser so that they can try to capture you as a customer. (Since I am in the mortgage business, I have to compete against this type of misleading information all the time--especially from pop-up ads on the internet.)

Generally, buying a foreclosure is more difficult in that there may not be a halfway reasonable human seller on the other side. Instead, the bank is represented by a "asset manager" who is limited in his actions by the instructions given to him by the bank. Also, the listing agent marketing the property may seem less responsive but this is primarily due to the volume of calls they get. Just make sure you have an experienced and trustworthy Realtor in YOUR corner.
0 votes Thank Flag Link Wed Aug 17, 2011
Hi Kris,

Sometimes yes and sometimes no which is why whether it is a foreclosure or not you should always be a home inspection done. Plus use all of your sense when view a home--it something doesn't "smell" right it probably isn't and should be checked out. Also in some cases a foreclosure has been stripped--I've seen everything from appliance to tile removed. The process of buying one of these "bargains is very similar to a regular purchase--and usually in the case of a foreclosure, unlike a short sale, you will usually have an answer within 2 to 3 days from the lender.
0 votes Thank Flag Link Tue Jul 19, 2011
If the home is significantly less in price than it's non foreclosure counterpart, there's a good chance that it needs work. If Homes in your area are selling for $100,000 and you see one priced @ $36,000, my guess is that it needs upwards of $50,000 to make it habitable. Any home that is priced significantly below market and doesn't need work is often sold within days.
0 votes Thank Flag Link Tue Jul 19, 2011
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