What do I need to do to start the process of buying a foreclosed home?

Asked by C3r1, Bergenfield, NJ Sat Aug 8, 2009

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Jack Vollenberg’s answer
Jack Vollenb…, Agent, Flemington, NJ
Mon Aug 10, 2009
Hi C3r1,

Some conflicting answers here. Let's summarize it for you:
1-Get pre-approved/prequalified......find out what you can comfortably buy.
2-Put in an offer. You do not need a significant amount of cash, but the bank may want more than your typical $1,000 good faith deposit.
3-You do not need a realtor or an attorney to buy a foreclosed home. But it's not in your best interest to learn as you go, is it? Use professionals and they will make it look easy!
4-You can do any and all inspections you want. The bank just treats them as inspections for informational purpose only. You find some serious defect, the bank may elect to ignore it and say that you bought it as-is. At that point you can always still walk away.
5-There are other investors out there with maybe lots of cash. If you see one, point them my way. I love working with them. There are plenty of REO properties out there for everyone.

I think that covers most of it. Have any more questions? Feel free to buzz me or e-mail me.


Jacobus "Jack" Vollenberg
RE Appraiser - Vollenberg Appraisers
Asset Manager - ERA Statewide Realty
Cell (973) 590-0142
0 votes
Francesca Pa…, Agent, Manasquan, NJ
Sun Aug 9, 2009

Without having read the previous respondents, be aware:

(1) that a significant amount of cash upfront may be required to secure as foreclsoure
(2) in mocst cases, you will NOT be allowed the liberty fo a home inspection that will provide u with a picture of what is involved in bringing the home "up to code"; and
(3) you will be up against those flippers who now have a plethora of cash that they must invest in RE (1031 invvestors) withint a short period fo time.

While the media would like us to believe that foreclsoures are the best investment, my investors have found that the foreclosure process is more challenging than ever due to the ever increasing competition.

Love and Peace,
Francesca, Realtor, ePro
Web Reference:  http://www.PatrizioRE.com
0 votes
Christine Ma…, Agent, Reseda, CA
Sun Aug 9, 2009
As already mentioned, ensuring that you can afford a property is always step one. Whether you're looking to pay cash or obtain financing, the bank is looking that you are financially able to go through with the purchase.

Once you've found a property you're interested in, you'll either make your offer using a complete contract but most likely, by submitting in a one page "Offer to Purchase". The Offer to Purchase is stating the purchase price, your down payment initially and the remaining down payment to be paid typically at signing of the complete contract (or if arranged on or before closing). Also you'll be stating your anticipated closing date, your acknowledgment as the buyer, to be responsible for all town inspections and lender required repairs, as well as whether or not your offer is subject to a home inspection.

The bank's look more favorably to cash deals with no inspections and closings within 30 days from my experience, however, cash offers tend to be lower, so if a buyer who's pre-approved with a significant down payment comes along - their offer is considered favorable too.

Team up with a real estate professional experienced with foreclosures - it'll run a lot smoother when working with the listing agent and the bank when your agent knows what to expect and to do. Any other foreclosure questions feel free to ask!

Christine Markow
ERA Statewide Realty
0 votes
Nancy Zaslowe, , Fort Lee, NJ
Sat Aug 8, 2009
Hi C3,

First you have to make sure you are financially quailfied to purchase in the correct price range.
Then you need a qualified Realtor who will guide you through the process. It's really very simple. I can help you with both just contact me.

Best of luck, Nancy
Web Reference:  http://weichert.com/fortlee
0 votes
Abe Mills, Agent, Greenville, SC
Sat Aug 8, 2009
I would most certainly go get pre-approved for the mortgage, and then my next stop would be looking for a REALTOR to help me find the property. A good REALTOR will take care of most of the leg work and the headaches involved in finding your home.

Good Luck
Web Reference:  http://www.abemills.com
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Aug 8, 2009
Any and all real estate purchases you must start off with lender approval letter of statement. Contact a mortgage broker have you qualified for a loan.

Once approval process is completed loan officer forwards qualification letter contact a Realtor provide copy of bank endorsement, specifications of type of home works with short / long goals, personal , professional lifestyle.

National Featured Realtor and Consultant, Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Web Reference:  http://www.lynn911.com
0 votes
Bill Eckler, Agent, Venice, FL
Sat Aug 8, 2009

As previously mentioned, it will be most beneficial to begin your task by doing so with the support of a real estate professioal that is working specifically for you.

Our advice is to arrange for financing prior to beginning your search. This pre-approval will equip you to be ready to move quickly on the right opportunity when it presents itself as well as set the perameters for the price range you will be exploring.

Your agent will be able to assist you with information thaat will assist you in arriving at a price range for your offer that should be an accurate reflection of the current real estate market.

Good luck
The Eckler Team
0 votes
Margaret Ama…, Agent, Sarasota, FL
Sat Aug 8, 2009
You are the buyer so just get in touch with a Realtor that works with buyers in the area you want to buy. This is the best way for you since banks don't sell to individuals but give blocks of assets to asset managers who in turn parcel them out to Realtors to sell.
0 votes
Peter J Roge…, Agent, Mahwah, NJ
Sat Aug 8, 2009
Buying a foreclosed home as opposed to a home in a "Short Sale" is relatively simpler. The owner has become the bank rather than the homeowner. However some of the responsibilities become the responsibility of the buyer rather than the seller. The bank will not normally effect any repairs that a seller would in response to inspection issues nor will the obtain the certificate of occupancy and correct any issues.
Some banks will place restrictions on your pre approval. Whereas a seller may accept a pre qualification the bank will often insist on a full pre approval and to that end may insist that the pre approval be issued by a specific lender
My suggestion is that you do not attempt this without the help of a qualified Real Estate agent. I am sure you have heard this many times but in the case of a foreclosure the Realtors help is essential.
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