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Abel Diaz, Other/Just Looking in Burbank, IL

for first time buyers is it better to buy a home the regular way or thru a forclosure? what is a foreclosure?

Asked by Abel Diaz, Burbank, IL Thu Jul 10, 2008

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Abel

There are different types of foreclosures. As a first time home buyer, I would avoid those on the Court House steps. The REO's, real estate owned buy the bank would be your better route. These are most often listed with real estate companies and, contrary to popular belief, can be negotiated. The up side of dealing with a bank is that there is no emotion involved. If the numbers work, you have a deal. The downside is that what you see, or don't see, is what you get. You must do your due diligence. Get an inspection regardless of the age or apparent condition of the house. Know what comparable sales in the area are. The foreclosure may not be a bargain if there was a large mortgage on the property. Find out, ususally from the county clerk, what the amount of foreclosure is. Be prepared to do work, both physically and mentally. These house are usually in poor condition having been trashed by the angry previous owner and may not even qualify for a mortgage. You would do yourself a great service in finding a buyer's agent to help you through the process.
0 votes Thank Flag Link Thu Jul 10, 2008
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0 votes Thank Flag Link Thu Jul 10, 2008
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0 votes Thank Flag Link Thu Jul 10, 2008
It depends on what you are looking for in a home. There are some well priced homes in foreclosure,but they likely will need work. If you are interested in the Riverside area, there are some great deals there.
0 votes Thank Flag Link Thu Jul 10, 2008
Foreclosures are "as is" , the bank may or may not know of any latent defects of the property. Even your fairly new construction cold have some issues. A foreclosure is a piece of property that has gone into default and the owner has lost all rights to redeem it. A preforeclosure is when an owner still has time to get current on their payments or sell it before it goes into foreclosure which is a lot worse because it shows up on their credit report. Unless you possess the "inspector's eye" to see existing and potential problems, and are handy with tools, I wouldn't advise buying a foreclosure. After all, this is the most important purchase you will make, you should have full disclosure on all the major components of the property.
0 votes Thank Flag Link Thu Jul 10, 2008
Abel,
If you can get yourself a qualified Realtor to work with you and represent you as a Buyer's Agent, you have an equal chance to negotiate a good deal on a home whether it is a foreclosure (or Bank Owned - also known as REO) or a home that is being sold by a homeowner.
It all comes down to doing research on what the value of homes are in the area you are interested in.

I just worked with a first-time Buyer. We looked at homes that were being sold by homeowners and then came upon a foreclosure that was Bank-owned. After researching neighborhood values, knowing what repairs she would need to do to the home, she ultimately purchased the home for almost $40,000 under what comparable homes were selling for. (her costs for improvements will probably come to under $10,000) This was the best choice for her.

So, it all depends on what is available in your area of interest. Look at all your options, and educate yourself so you can make the decision that best suits your needs.

All the Best to you!
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0 votes Thank Flag Link Thu Jul 10, 2008
Bank foreclosure or traditional sale are both okey. But with a traditional sale you have more leverage when it comes to negotiating your terms but sometimes it could also be a problem because has some emotional attachment to the house while with bank owned property all they want to know is the bottom line which the money. Check with a reliable realtor in the area. It is always nicer to seat down with a realtor and see face to face and get better feedback on it (if they do get along with you)
0 votes Thank Flag Link Thu Jul 10, 2008
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