I am a first time home buyer and would like to buy a forclosed home in parsippany. What is the process, how do I walk through the houses, can I get?

Asked by P, Morristown, NJ Wed Feb 10, 2010

it done before the tax credit runs out, and do I need a special RE agent?

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Gina Chirico, Agent, Fairfield, NJ
Wed Feb 10, 2010
Hi P,

Buying your first home can be as exciting as it is nerve wrecking all at the same time -- but everything works out in the end! You've received some good responses and I would like to determine your needs.

Do you understand the difference between a foreclosed property which is REO (bank owned), a property listed as a short sale which the seller owes more to the bank that the house is worth today and a property listed on public records under foreclosure and states that a notice of lis pendens has been filed which means the owner defaulted on their mortgage. It doesn't necessarily mean that the property is for sale. Its just the first step the bank takes in a foreclosure action. Many buyers are unaware that these three things mean totally different things.

Moving forward, Is there a specific reason you are limiting yourself to foreclosure properties? Do you think they are a better deal compared to other homes on the market? Have you physically compared them to other homes? I'm not saying that there are not some foreclosures that are good deals but sometimes they are in need of rehab and can cost a decent amount of money to make the repairs. Again, depending on your needs and financial situation, its best to find an agent, get your financing and approval in order (you may qualify for a 203K loan if buying a foreclosure), start weighing your options and looking at homes. There is time to still take advantage of the tax credit but you do need to act fast and work with an agent.

I would be happy to assist you in determining your needs and buying your first home. Please feel free to contact me through Trulia or directly. My contact information is below.

Good luck. Stay safe in this blizzard today!

Gina Chirico, Sales Associate
Prudential NJ Properties
973-715-1158 cell
973-992-6363 ext 116 office
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Scott Godzyk, Agent, Manchester, NH
Wed Feb 10, 2010
P you should definately hire a buyer broker who is experienced with bank owned homes. You can hire a buyer broker at no cost to you, they get paid their commission at closing from the listing brokers fee offered in MLS. You should make sure you are preapproved for a loan, be ready to close in 30 days, dont ask for anything to be done, dont add any contingincies, do your inspection before making an offer and make your best offer up front if there is any other offers already in. Good luck
Web Reference:  http://www.ScottSellsNH.com
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MorrisRealtor, , Morris County, NJ
Wed Feb 10, 2010
While they may be tempting, there's a VERY complicated and lengthy process involved in purchasing both forclosures and short sales. It may well take you past the end April timeframe to be "in contract" and thus eligible for the current tax credit. I'd suggest that you find an experienced, full-time agent who would be willing to spend time with you to review all the details. Knowledge is power!

Then, broaden your sights and consider ALL that is out there. An agent with proven negotiating skills can help you discern where a great buy may be had. I'd welcome your call after you take a look at my credentials on http://www.JaneAsdal.com. My direct line is 973-769-3119.

Best of luck to you, whatever path you choose to follow! Jane
Web Reference:  http://www.JaneAsdal.com
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Don Tepper, Agent, Burke, VA
Wed Feb 10, 2010
Great answers by Kathy and Jill. Do not limit yourself to foreclosures.

No, you don't need a "special" real estate agent.

A couple of important points: First, don't focus on the tax credit. Sure, it's nice. But find a home at the right price. If you keep focusing on that credit, you may find yourself tempted to overpay. ("Well, it is priced a bit higher, but I am getting a tax credit.") Wrong way to approach the issue. Find a home that works for you and is a good value. Besides, let's say you own the home 8 years from now. Do you think, in 8 years, that you'll have hung onto any of the benefits of the tax credit? If you're smart and frugal--put some into your IRA and some into long-term savings, maybe. But unlikely. And if you buy wrong now, you'll be stuck with your mistake 8 years from now. So: View the tax credit as a nice bonus, but not as the reason to buy now, and not as the reason to buy a specific home now.

Second, to the extent that you might want to take advantage of the tax credit, recognize that you're a lot safer buying from a homeowner--a nice, regular purchase--than a foreclosure. Some banks sell some foreclosures quickly. But others can take a long, long time. (Not as bad as short sales, but still a long time.) If you're worried now about buying before the tax credit expires, imagine how you'll feel about 10 days before it expires and you're still negotiating with the bank.

Hope that helps.
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Elaine D. St…, , Brooklyn, NY
Wed Feb 10, 2010
Hi Kathy:

All of the Realtors below are offering sound advise. To add to that. I would say yes you may want to work with a Realtor experienced in REO's. The main hold up right now with the selling bank is if you try to negotiate the price you will definately loose time. As far as the purchasing side, there really shouldn't be any delay as long as you are dealing with an experienced mortgage banker. If you have not already, you should have a mortgage consultantion and if you are considering buying REO's then you definately need to be consulted on The renovation loan programs.
The reason for this is most REOs may need work as they could be damaged by the previous owner or just from sitting vacant during the winter season. Your lender will not be willing to close on a property that has certain defects noted in the appraisal. The selling bank is selling the property as is and will not cure these defects so you would need to get the purchase renovation loan so you can close and begin the repairs after you take ownership.
Knowing this in advance and finding out what your maximum qualifying is for a loan, factoring in that the amount you are qualified for "MAY" need to include an $ for financed renovation will surely equip you in the process.
As a Renovation Loan Specialist experienced with first time buyers in (NY & NJ) to this process, I am more than happy to offer you a consultation on the loan program.
Please feel free to contact me. Click on my profile or just send me an email so I can contact you.
All The Best
EMAIL: estroman@cccmtg.com
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Sharon Home…, Agent, Livingston, NJ
Wed Feb 10, 2010
Dear P,

I am not sure if you curretnly have a property in mind or you are just starting the process and looking for someone to assist you in finding Forclosure properties in Parsippany.

My partner Sharon Avram and I (Karen Abramson) worked in the past with several clients who looked for forclosed properties and we know the process well.

The process is similar to a regular home buying...

1. you find the house, than you look at it.
2. Once you determine that you like the property, with an assistance of a real estate attorney we find out as much information regarding the clear title of the house.
3. If all is well, we will make an offer that will be sent to the bank's realtors to be submitted to the bank.
4. The banks usually will sell the properties in "AS IS" condition - meaning they will not repair anything in the house it will be your responsibility as the buyer not only to take the house with any defects but also to assume the responsibility of obtaining a C/O - Certificate of occupancy from the township.
5. If the all the above are cleared and the bank accept your offer, we move forward to getting the finances and inspecitons as quickly as possible.

As to the questions can it be done before the tax credit runs out (Have a cotract signed by April 30th) - the answer is YES! As long as you find the house quickly and ready to move along the process swifly, there should be no problems.

The banks usually try to close on their property quickly (about 30-45 days from acceptance of the offer).

Feel free to contact us with any further questions. Sincerely,

Sharon Avram and Karen Abramson, Sale Associates
Prudential New Jersey Properties
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Kathy Sorkin, , Morris County, NJ
Wed Feb 10, 2010
There is so much in the news about buying foreclosures but they are not always such a great deal. You definitely need an agent that can help with showing you homes, negotiating and knowing what the market is so you are getting a good price. kasorkin3@att.net-Kathy Sorkin from Weichert Realtors
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Jill Southren, Agent, Denville, NJ
Wed Feb 10, 2010
Hi P -
Don't just limit yourself to the foreclosure properties since they are time consuming. Since you are a first time home buyer, you should be taking advantage of the first time home buyer tax credit of $8,000. To make sure you receive this, you will have to be "under contract" by April 30, 2010 and "close" on the property by June 30, 2010. Since the banks are taking some time to make decisions, let's see all of the properties that are of interest to you. What are your needs?....Bedrooms, Baths, garage, single family home or townhouse? Price point? I would love the opportunity to help you find your first home. I do handle Parsippany as well as all of the neighboring towns in Morris County. Please feel free to reach out to me on my cell 201-650-3722. I look forward to hearing from you - Jill
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Robert Pratt, Agent, Chicago, IL
Wed Feb 10, 2010
The answer is YES! Get yourself an agent that has seen these types of sales through to the end! There are so many financial and time consuming pitfalls that come along with the process of searching for and eventually purchasing an REO property you should absolutely get yourself an agent that can prove they've done these types of sales before. Ie testimonials, references, etc. It's not a bad thing to ask for examples of other addresses that they've seen through to closing.
Web Reference:  http://www.dreamtown.com
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