I hear about so many foreclosure properties.How can I purchase a foreclosure home &how does the financing wk?

Asked by Nicole, Chandler, AZ Tue Jan 1, 2008

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Jennifer Kre…, Home Seller, 95124
Tue Jan 1, 2008
There are different stages of a foreclosure, so it depends on what stage the property is in.
The earliest is after a Notice of Default. The homeowner still owns the home and can negotiate with the bank on a sale. If they are upside down, it's usually a short sale. Short sales can take months to get an approval on your offer because both the homeowner and the lender have to approve the sale. The financing for this stage would be the same as a regular sale, but the lender foreclosing may make their acceptance of the offer contingent on you being able to get your financing in a very short time period (we were asked to make it happen in two weeks).
The next stage is a public auction. If the home is at auction then the property is generally sold "as is" and for cash only. You must qualify with cash before you arrive at the auction.
The last stage is when the property is bank owned (aka REO). This sale is similar to a regular sale. The bank will have a Realtor selling the property. You should have your own Realtor too. The property is usually "as is" but you can get your financing the same as any regular sale.
Any way, I'm not a Realtor, I'm just a person that's been looking at foreclosures as a way to increase the possible homes I'm looking at. I've been through a short sale process for four months and in the end I did not get the house. The house is now up for auction and I'm trying to decide if it's worth trying to get cash together to buy it. It will be very difficult for me to do that.
Good Luck.
3 votes
Joe Homs, Agent, Laguna Hills, CA
Wed Feb 27, 2008
Find a real estate agent that's an expert in this field. If you need step by step instructions, then give me a call!
Web Reference:  http://www.joehoms.com
0 votes
Sandra Carli…, Agent, Newport Beach, CA
Thu Jan 24, 2008
Financing is the same as any other purchase. You will have to have your ducks in a row by getting approved (not pre-approved or pre-qualified), but have everything fully submitted and a copy of your FICO scores and proof of funds for the downpayment. A whole package including a clean offer will be submitted. (Don't expect to get repairs, etc...) It is usually an as-is purchase.

Don't cut yourself short by focusing solely on these properties. There are a lot of homes, potentially in better condition and without the wait of buying a foreclosure, on the market right now. You may even have more negotiating power than these foreclosures and even bank owned properties, plus less chance of being in a multiple offer situation. The highest demand right now is for bank owned, foreclosure, short sales, etc...

Stay away from the pack to make the best investment.
Web Reference:  http://www.OCBeachBlog.com
0 votes
Realtor, ,
Tue Jan 1, 2008
You should contact a mortgage broker to get pre-approved. Then find a good realtor to help with this transaction. Most lenders may list the home with a realtor, but won't allow that same realtor to represent both the buyer and seller. Time is of the essence in these types of transactions and will usually require a significant deposit. Good luck.
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