How do you buy the homes that are listed as foreclosures?

Asked by Quintero, Illinois Fri Aug 1, 2008

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Greg Zaccagni, , Illinois
Sat Aug 2, 2008
As pointed out by Brandon, Dino & Lisa the stage a foreclosures is in is going to affect your answer. I have attempted to compare short sales & REO's in the blog attached and hope you find it helpful.
Comparing REO’s & Short Sales for Buyers |
2 votes
Marcy Brown, , Naperville, IL
Thu Aug 7, 2008
Lots of good answers to your question. Let me just add my 2 cents. The most important thing is to work with an agent that knows what they are doing. Short sales in particular are a lot of work. And it is not just YOUR agent that has to know what they are doing, it is also, and even more importantly the listing agent that has to know what they are doing. Of course, you have no control over that, but at least if you agent is versed, they can help in moving things along. REO's are a piece of cake, short sale's on the other hand are a lot of work and communication is key.... know the difference between a short-sale and REO and be patient. Short sales were taking 3-4 weeks beginning of the year. Last one I closed took 12 weeks to get the bank to even look at our contract. By then, all the dates on the contract were expired. Short- sales are fairly new to everyone, even attorneys. Be sure that you are protected from the start!.
1 vote
Bob Brandt, Agent, Schaumburg, IL
Tue Aug 5, 2008
When you see a foreclosure in the Realtor MLS, it is fairly straightforward and almost a normal transaction. Your Realtor can show it to you,do an analysis with you, make an offer with you and massage you through the little nuances.
Web Reference:
1 vote
Dino Patras, , Arlington Heights, IL
Fri Aug 1, 2008
Bank owned foreclosures (REO) and Short Sales or Pre-Forclosures are two different animals. Make sure you understand the difference between the two.
1 vote
Brandon Schu…, Agent, Western Springs, IL
Fri Aug 1, 2008
It really depends on who is offering the property for sale. Some of them are offered through auctions and some are listed through Real Estate Brokers. You can also have a possiblity of purchasing a property through "short sales". This is where the owner has a chance to offer the property for sale, yet the bank makes the final decision to except an offer that's less then what is owed on the property. This, along with individual home owners trying to sell, is a great way to purchase a home right now with values being down.

It's a Great Time to Buy a Home!!
1 vote
CMLHoldings, Other Pro, Streamwood, IL
Fri Aug 1, 2008
I'm Going through the process myself for the 2nd time this year on a purchase. First, find a Realtor that not only specializes in the area that you are looking at but one that has experience dealing with foreclosures as well as short sell properties. I have found that their are a lot of part time Realtors in the Chicagoland area so make sure that you are dealing with a competent full time Realtor.
An experienced Realtor will guide you through everything.

Second, get ready for a big waiting game with the banks! You would think that they would jump all over an offer but the facts are, they are so overwhelmed with foreclosures that your file just sits on a desk.
It's not uncommon to wait 30,45 or even 60 days for a response from the bank. Remember, these are hourly people that work at the bank and they just don't have the urgency like you would.

If you have the patients then it's a good deal, however, if the property is priced well or below comps then expect competition. Alot of buyers out there sitting on the fence waiting for the market to finally bottom out.

Good luck!
1 vote
CMLHoldings, Other Pro, Streamwood, IL
Fri Aug 8, 2008
You hit that one on the nose Marcy. I think what your industry is seeing is the weeding out of all the late comers to the Realestate Industry that saw a quick and easy buck.
Fortunately, I have an 18 yr veteran Realtor representing my intrest and he is versed in all of these types of sales. Unfortunately, he finds he runs into way too many part time or inexperianced Realtors that do not know how to deal with Short sales and Foreclosures.
My first foreclosure i\back in Feb took 8 weeks and I'm afreaid that you are correct that this one will take 12 weeks (we are already 4 weeks into it).

Lots of fantastic deals out there with short sales/Foreclosers but patients is required to pull it off.
0 votes
CMLHoldings, Other Pro, Streamwood, IL
Tue Aug 5, 2008
My experience with my first foreclosure and now the 2nd one that I am buying are far from straight forward. ( The selling Realtor is a rude part timer) Generally, the selling Realtor is at the mercy of the bank which do not tend to communicate very well or at all. Again, Patience is a must if you want to deal with a foreclosure. Alot of deals out there but you will need to play the waiting game.
0 votes
Lisa Schade, Agent, Libertyville, IL
Sat Aug 2, 2008
HI Quentero-
Where are you seeing the homes listed as foreclsoures.
An Auctioned Property will not be listed inteh MLS. They are cash sales with 24 hour turnaround. They will only be listed in ad copy like the Pioneer Press.

A short sale is in fact, where the buyer still has the right to offer the home for sale, however, the bank has the final decision, as to how much loss they are willing to take.

A Pre-Foreclosure-for a buyer's purpose is the same as a short sale.

To answer your question, you find a specialized agent who's specialty is foreclosures or short sales, etc. They they MUST be versed in the area in which you want to buy. They must know market share.
And then for the buyer, the process is the same, it just takes a LOT longer.

Hope that helps.
0 votes
Tino Martinez, , Illinois
Fri Aug 1, 2008
most of them are immediately listed with a realtor- I can put you in touch with a local realtor who will show you FORECLOSED properties.

I have been a mortgage banker for 21 years and can also get you pre-qualified for a purchase amount, do you can confidently make an offer when you see something you have to have.

Tino Martinez
0 votes
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