how long can it take to purchase a foreclosed home?

Asked by Nelly Mendez, Niles, IL Sat May 8, 2010

I may be interested in looking into buying a foreclosed home but am concerned about how long the process wll take? is it months?

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Diane Wheatley’s answer
Diane Wheatl…, Agent, Upland, CA
Sat May 8, 2010
A foreclosed home is basically the same as purchasing a standard sale home. Escrow will be as quickly as your loan or cash can pass through escrow. It is when you negotiate on a pre-foreclosure home or short sale that the length of time until you get your keys can be an unknown lengthy process.

It is best to stick with REO (real estate owned) properties that have already been foreclosed on at a trustee's sale if you are looking to close relatively quickly. But be prepared to act very quickly on these properties as there are other buyers looking for an opportunity to purchase one these homes right behind you.

Good luck!

Diane Wheatley, Broker
Move Up Properties Real Estate
(888) 981-5589
1 vote
mfclayton1949, Home Buyer, Caledonia, MS
Thu Oct 3, 2013
I purchased a foreclosure, it was a HUD home. It took 30 days. I am now in the process of purchasing another home but it is a conventional loan and don't have a clue how long it will take. It has been 11 days since they have accepted my offer but I still don't havea projected closing date.
0 votes
Erin, , South Lake Tahoe, CA
Sun May 9, 2010
Hi Nelly; To simply answer your question, I've seen bank owned purchases close in 7 days, and others that take 40 days from acceptance of your offer. It depends upon your particular circumstance and the circumstance of the listed home.

Best idea--contact a Realtor directly that you want to represent you in the purchase who can give you more pointed advice. The fact that you are located in Illinois will add a few days to the transaction for document transmittal.

The competition for bank owned homes is fierce here in Sacramento, so you need to be; resolved, swift, deliberate, smart, and persistent. You'll probably wind up making offers on several properties before you end up with one, especially in the price range under $200K. I've worked with a few investors who don't come in with these qualities and who end up giving up and don't get anything.

Be--ready with your pre-approval if you need a loan or ready to get copies of your accounts with funds to close escrow to your Realtor so you can be the "best" buyer.

Good luck.

Erin Phillips
Keller Williams Realty
Roseville, CA
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0 votes
James Wehner, Agent, Scottsdale, AZ
Sat May 8, 2010
If it's a pre-foreclosure (short sale), then you may be looking at months, but a typical REO transaction (lender owned sale) should take no longer than 45 days.
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Jim Walker, Agent, Carmichael, CA
Sat May 8, 2010
The best values that are likely to have the quickest processing time are 1: Newly built homes in builders standing inventory, these are A. Move in ready within days. B. Come with a California state income tax credit of up to $10,000 for owner occupants. C. Have new appliances, well, new everything. D. Are warrantied for cosmetic as well as operational and structural problems. E. The builder will pay your buyers agent her or his commission. You don't pay the realty commission. Include new homes on your tour along with foreclosures.

2. After new homes, the best resale homes to look at are regular sellers who have equity, and are ready to, or need to sell anyway. Normal sellers can match the banks on low price, but offer better transaction terms and a better experience to the buyer.

3. Rehabbed "flipped" houses. Contractors who used to build custom homes buy broken houses from the banks, fix them up nicely, and resell them for prices that compete with the distressed properties. These contractors work on much thinner profit margins than you would expect. It will cost you less to buy a contractors finished "flip" than it would cost you to buy the fixer yourself and hire the work done.

4. Low list prices on bank owned and short sales are illusory these days, many go for over the opening bid price (also referred to as "list price" ) Low list prices of houses are like low starting prices on eBay. There is usually a "reserve" price below which the bank will not agree to sell for less than. The "reserve" price is unknown to the buyer, but it is usually more than list price, and sometimes more than market value.
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Sat May 8, 2010
Hello Nelly,

When you buy a foreclosed home, the process usually takes from 30 - 45 days. You may be thinking about Short sales rather then foreclosueres...the short sales can take up to several months but the process is currently being streamlined. Good luck :)

Kamal Randhawa
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