What is the procedure to buy a home in forclosure, and do Realtors work with buyers to do this?

Asked by Kate, Chapel Hill, NC Wed Jan 14, 2009

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Voices Member, , Benton County, OR
Wed Jan 14, 2009
Kate, This might help you better understand the process...http://articles.moneycentral.msn.com/Investing/RealEstate/Th…


http://www.biggerpockets.com/foreclosure-process.html ....also has the foreclosure laws for each state..

Hope these help you, Dunes
2 votes
Vicky Chrisn…, Agent, Purcellvile, VA
Thu Jan 15, 2009
These posts may assist you.
1 vote
Marty Jones,…, , Cashiers, NC
Thu Jan 15, 2009
Hi Kate,

The procedure, at least to begin, is the same as a home that isn't in foreclosure. If the Seller is still owner of record, you will make an offer and come to an agreement with the Seller.

The rub comes if it's in foreclosure already, or if the price you've negotiated doesn't pay the mortgage the Seller owes. If the latter is the case, it's what's called a "short sale". If the former is the case, still not a huge deal, it's similar to the short sale in that it will require bank approval, but may also require legal work from the closing attorney.

The bottom line is, if it's in foreclosure, or the sale is going to be a short sale, it will require participation and approval from the bank. This means there are more persons from whom you have to get approval, and the process is a bit longer. It doesn't mean it can't be done, and yes, I would strongly suggest you work with an EXPERIENCED REALTOR through this process. There can be a lot of unexpected twists and turns, such as second mortgages, junior liens, unpaid assessments and or taxes in arrears, through which an experienced broker can help you navigate..

Hope this helps and feel free to contact me at marty@martyjonesrealty.com.

Marty Jones, CRS, CRB
1 vote
Barrett Powe…, , Cary, NC
Wed Jan 14, 2009
Even as a Realtor, if I were purchasing a foreclosure myself, I would want representation to look after my interest from a pure purchase/investment perspective without emotional involvement. Even though I consider myself a professional, I would always seek out the advice and extra set of eyes and hands to make sure I'm making a sound investment, ESPECIALYY with a foreclosed property.
1 vote
Polly Floyd, Agent, Wilmington, NC
Wed Jan 14, 2009
Yes, it is always best to have a Realtor to help you. When buying a foreclosure it is very similar to buying any home, except there are more forms that have to be filled out, the process takes much longer, once the offer is sent it usually takes much longer to get the answer back from the seller( Bank or Mortgage holder/owner if forclosed), the property is sold as is in most case, no repairs will be made by the seller in most cases, you have to send with the offer proof of funds to purchase or proof that you are qualified for the mortgage, and the Deed transfers as a Special Warranty Deed. Don't write the offer and expect to close in a short time. I have closed some in just over 30 days, but it could take longer. Aloow at least 60 to 90 days for closing. The listing Realtor can give your Realtor estimate of time.
1 vote
Daniel Eberw…, Agent, Clayton, NC
Wed Jan 14, 2009
Kate - The process is pretty similar to purchasing a non-foreclosed house, it's the details that are different. Is the house in the process of being foreclosed, or is it foreclosed already?

If it is already foreclosed, then you make an offer of a price based on value and condition, and the bank either accepts, rejects, or counters. Foreclosures are sold as-is, and usually have addendum's (some addendum's are longer then the contracts). Donald wasn't completely accurate in his statement "Realtors who are making a bid on behave of the buyer on a foreclosed property must be registered with the government to do so" That only applies to HUD foreclosures. The majority of foreclosures in the Triangle Market are not HUD foreclosures, and any Realtor can assist you in purchasing those without being a HUD registered agent.

If it is in the process of being foreclosed, you make an offer to the owner. A short sale comes into play when the owner owes more for the house then it is currently worth. With the Triangle having had steady, slow appreciation for the most part, this isn't as common as in some states. If the owner does owe more then the house is worth, the bank has to approve the offer. This is a slow process, and can take 6 to 8 weeks to close on the house.

Let me know if you have additional questions.

Web Reference:  http://www.tri4sale.com
1 vote
Michael Colv…, Agent,
Wed Jan 14, 2009
Hi Kate
The simple answer is yes, I am working with a seller and a buyer on a short sale right now, which is just before the foreclosure starts, we are on week 9, so it is sometimes a long process. I would not recommend going it alone, always get yourself a Realtor , so you have representation.
Web Reference:  http://www.colvinm.hpw.com
1 vote
Erica McClen…, , Raleigh, NC
Wed Jan 14, 2009
The previous post is correct! I would agree that having a Realtor on your side is a huge benefit, but not all Realtors are foreclosure savvy. We specialize in foreclosures and short sales. I'm happy to discuss our free VIP Home buyer program. It will give you FREE access to all the active foreclosures and short sales in the Triangle area.

Feel free to drop me a note at erica@triangleliving.com or a call at 919-389-8702. Happy House Hunting!
1 vote
Donald Hays, Agent, San Antonio, TX
Wed Jan 14, 2009
If the home is in the process of being forclosed the seller may ask the lender to do what is called a short sale. This allows the seller to sell the home usually for less than what they owe on the home. For the buyer there is no guarantee that the sellers lender will accept what the buyer offers. If the home has been forclosd then it is usually on a bid basis. Once the home comes on the market the buyer only has 10 days to submit a bid on the home. If the buyers bid is accepted then the closing will take place in 45 days and the home is being purchased as is.

The buyer needs to make sure that the Realtor that they hire is experineced enough to assist them with the purchase. Realtors who are making a bid on behave of the buyer on a forclosed property must be registered with the government to do so. Check with you agent to see if they and their broker are HUD approved.
1 vote
My NC Homes…, Agent, Chapel Hill, NC
Wed Aug 25, 2010
Kate, I’m a Real Estate Broker in Chapel Hill and regularly work with Buyer clients who are pursuing bank owned properties. I am extremely familiar with foreclosure properties; in the past I represented Banks and now with I work exclusively with Buyer clients. I do not recommend bidding for Foreclosures on the court house steps for a number of reasons. In short I feel they are simply too inherently too risky. In my opinion it’s better to let the mortgage lender get the property and clear up any and all outstanding liens and then purchase it directly from them. The procedure at that point is fairly straightforward and I have helped 7 clients this year alone buy property in this manner and am currently working with a new buyer client on an 8th transaction.

You want to find someone you can trust and who has the experience to assist you in your due diligence and who will help you to minimize the risks involved whenever you are buying a property that will be sold “As-Is” You do not want to work with someone who isn’t familiar with the process and hasn’t done this numerous times.

If I can be of any assistance to you, please let me know.
0 votes
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