How do I buy a foreclosure home?

Asked by Beth, Las Vegas, Las Vegas, NV Tue Dec 27, 2011

foreclosure home.

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22
James Tan, Agent, elk grove, CA
Fri Jan 6, 2012
I assume that you meant buying a house that has been foreclosed by the Bank and is now owned by the Bank (REO). Depending on the ultimate owner of the note, there are different types of REOs:
a. HUD (FHA)
b. FNMA (Fannie Mae)
c. Freddie Mac
d. VA
e. private sector Banks/Investors
The process of buying is quite similar as buying in a regular sale. There are some differences though:
a. the Bank has its own addendum which supersede buyer's offer contract
b. typically the Bank will not do any repairs (AS IS)
c. typically the inspection period is 10 days or less
d. many times the utilities in the property are not on (gas, electricity, etc.) which makes it difficult to do
inspections
e. the condition of the property is often times bad, because of neglect, vandalism, theft, sometimes by the original owner

The government lenders (a, b and c) give preference to owner occupied buyers. They usually get a bonus , and first-look period. In VA case, buyer can get vendee financing, even investors.

Hope that helps
Web Reference:  http://www.BuyHomeInUS.com
1 vote
Paul May, , Las Vegas, NV
Tue Dec 27, 2011
Buying a foreclosure home is a similar process to a traditional purchase, except you are purchasing the property typically in "as-is" condition- and the seller is the bank.
If you want to receive a list of not only the bank owned properties on the market but also bank owned properties that are in pre list stage- not yet on the market but soon will be, then contact me-
We carry one of the largest portfolio's of bank owned properties in Las Vegas/Henderson area-
We can walk you thru the process and succesfully help you purchase-
We just need your wish list-
Thanks Paul May
Web Reference:  http://www.mayteamlv.com
1 vote
Renee Burrows, Agent, Las Vegas, NV
Sun Jan 22, 2012
Right now we have very few available foreclosure homes due to AB284. I have a tutorial on purchasing a bank owned home linked below
0 votes
David Cooper, Agent, Los Angeles, CA
Mon Jan 16, 2012
Find a buyer's agent who folows Bank Owned Foreclosures on a daily basis. It has been reported that bnk owned foreclosures sell for 20% less than comparable resale homes, but you will have added fix-up expenses. If you forward me your email, I can set you up with ad aily update of low-priced houses.

DAVID COOPER Professional Investor CALL +1-702-739-8820 at Since 1917 Realty

1 – PURCHASE We professionally purchase bank owned properties For You
2 – REHAB• Our team performs a complete rehab on all purchased properties.

3 – LEASED• Upon completed rehab, we secure a qualified tenant in a leas
0 votes
Michael Ford, Agent,
Mon Jan 16, 2012
first, why a foreclosure? if you're looking for a good price you can likely do as well with a short sale and you'll have a better disclosure file after the sale. REO's are notorious for having deficient disclosures...the banks fall back on the old "we're exempt" line to deliver none of the standard buyer protective disclosures that have become the bedrock of the resale transaction. REO's are not for the timid and the bank counteroffers are COMPOSED TO COMPLETELY FAVOR THE SELLER. they have many terms in them that are entirely at odds with the local practices and which are not buyer friendly at all. where your agent may be well acquainted with the common contracts used by the local agent community, the bank counter-offer will be longer and very different. their ability to guide you through it is lessened as they are not intimately familiar with the contracts. the rule of REO is...read the contracts carefully.

I am not saying don't go REO, just saying that in a market such as yours with so many distress sales that you can easily match the deal with a couple of savvy agents and a willing short sale seller. If you are patient and clearly express this to the listing agent that you're not going to disappear after they get the approval you will be a welcome buyer that can do well and help out some underwater seller at the same time.

lots of good advice below as to how to prep yourself to offer and what to expect. in the long term you will be glad you bought. todays mortgage interest rates and home prices are a perfect storm of opportunity.
0 votes
Tammy Hayes, Agent, Port Charlotte, FL
Fri Jan 13, 2012
Here is some information that might be helpful in buying an REO or Bank Foreclosed home.

Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.

A lot of foreclosures are going into multiple offer situations. Most buyers think that if they have the highest purchase price, they're going to get the property. Often this is not always the case. One of the big things they look at is the timeframe for the inspection. This is a contingency on the contract and the banks want it satisfied ASAP. Instead of the usual inspection period of 15 days, if you can do it in l0 days or less, the better. Another is the timeframe for closing. If paying cash they usually prefer the closing date to be no more than 2 weeks. A conventional loan can be 30 days and FHA 45. Just make sure you are prepared to close in the specified time or you could be charged $100 per day or more for each day beyond the original closing date. Also a larger deposit generally indicates a more serious buyer in their eyes.

Another point is to not go into another month. For instance, if you can close on the third week of the month it’s usually preferred. They usually don't like to close in the last few days of the month because it might have to be extended into the next month. The banks like to close out their books each month and not have to extend. This is especially true if it is the end of the quarter. Lower offers have been accepted because the closing date was the third week in the month.

Tammy Hayes, Realtor
Green Lion Realty, Port Charlotte, FL
http://www.greenlionrealty.com
tammyhayesre@gmail.com
0 votes
Damon Bottic…, Agent, Las Vegas, NV
Fri Jan 13, 2012
1st step is to determine your price range and how you plan to pay for it.
If you need a mortgage, the next step is to talk to a lender to find out your approved price range and payment amounts.
http://www.botticellihomes.com/prequalify.shtml

Next step is to find a buyer's agent who can listen to your needs & wants and set up property searches and show you homes. A full time agent with a proven track record and solid references is required in today's market.

From that point until closing, your agent will walk you through each of the steps.
0 votes
Matt Chilton, Agent, Cornelius, NC
Tue Jan 10, 2012
Begin by selecting an experianced agent that knows the pit-falls and the trip wires. Buyers can saves lots of money, but there are risks. Inspections are key. Know what you are buying. Most REO sellers have very strict contracts and the closing dates are taken very serious. Usually a $100.00 per day fine is levied against the buyer if there is a delay. There are other items to me careful of when writing the offer as well.
0 votes
Bruce Sutori…, , El Sobrante, CA
Thu Jan 5, 2012
To start with realize that you are dealing exclusively with bank' and yes they are heartless. The bank also has infinite patience. The property has most likely drop in value considerably since the foreclosure began so don't try to give a low bid to start with. Instead offer a little over the asking price that might get their attention.
With all this said don't do this on your own, let your Realtor do the work for you.
0 votes
Richard Schu…, Agent, Los Angeles, CA
Wed Dec 28, 2011
The process of buying a foreclosed home is much like the process of buying a traditional, standard sale home. Keep in mind, that while many people think you can go in with a "lowball" offer to the bank on a foreclosure listing, most of the time this simply will not work. For one, there is a lot of competition out there. Two, banks are not necessarily specifically motivated to sell an individual property. Rather than selling at a large percentage off of list price, they simply may wait a few weeks, and lower the listing price. You can read more about the process of buying a foreclosure by visiting here: http://richardschulman.com/buyers/foreclosures/
0 votes
Will Nabhan, Agent, Las Vegas, NV
Wed Dec 28, 2011
Is your question in regard to buying a foreclosure, which is purchased at auction or an REO which has already been purchased at auction, usually by the original lender? I can discuss both types of purchases with you. Please feel free to contact me at anytime.
Web Reference:  http://www.FreeMoveHome.com
0 votes
Susan Elsigi…, Agent, Las Vegas, NV
Wed Dec 28, 2011
Are you qualifyed? AFter that the rest is easy! : ) suesellshomes4u@cox.net
0 votes
Kurt Grosse, Agent, Las Vegas, NV
Tue Dec 27, 2011
Beth, many of these answers are good. I am assuming you want a foreclosure to get the most house for your money. Often a foreclosure is not the best "deal". Before I started in real estate 16 years ago, I was a Nevada Professional Engineer. When I show a buyer I'm working with properties, I am looking for flaws and potential problems. Especially when looking at bank owned properties, my expertise is invaluable. I have seen the worst of the worst which is not always a "good deal". The short sale homes are really where the deals are right now in Las Vegas. I have some theories and ideas and would like to develop a plan of action with you to find the right property for you. Give me a call anytime and we can talk. Thanks, Kurt 702.656.1818
0 votes
Steven Sales, Agent, Henderson, NV
Tue Dec 27, 2011
This is a very simple process. Find a Realtor that you are comfortable with and that will keep all issues simple.. Locate a property that meets your needs in the right price range. Place an offer on it and see if the offer gets accepted. Repeat the proceess until problem is solved.

Sincerely,
Steven sales Keller Williams
Certified Green Realtor
702-845-5348
0 votes
Betty Gammon, Agent, Las Vegas, NV
Tue Dec 27, 2011
Good for you Beth, researching and asking questions. Hopefully I can answer some of those questions.

Buyers sometimes begin their home search wanting to consider a foreclosed property (bank owned – in the industry called “REO”). Often you are able to save money buying a foreclosure compared with the traditional way of purchasing a home, but not always. Foreclosures can actually be priced higher than the home’s market value as the seller (the bank) is trying to pay off the mortgage and cover taxes and transaction costs; plus the REO property might need extensive repairs which needs to be calculated into your costs. Be encouraged though, as there could be special financing available for you for doing repairs, and some bank owned homes are actually in very good condition.

Additionally, this type of transaction requires patience and a bit of good luck as there is sometimes competition for REO homes having several offers. An licensed real estate agent can research foreclosed properties for sale, determine market value and if there are competitive offers, check judgments and liens, and show you homes as with any conventional property for sale. Often you are at an advantage if you can pay cash, but that certainly are exceptions to this.

There are also short sales which you might want to consider that are being sold by the homeowner as with any conventional sale, but for less than the amount owned on the property. Since the seller’s lender is paying for many of the costs associated with a short sale, it requires their approval and sometimes can take a long time. So if you are in a hurry, you might not want to consider a short sale. But there are advantages since the homeowner often continues to live in the home until close of escrow so it continues being maintained.

In the past there was a large inventory of REO properties in Las Vegas area, but recently there are considerably more short sales for sale than REO properties. Some speculation suggests this might change sometime in 2012. Of the single family homes for sale in the Las Vegas area as of December 27, 2011, there are a total of 9883 - 4558 are short sales; 53 are going to auction; 1799 are bank owned; and 3473 are conventional sales.

Right now financing interest rates are very low and purchasing a home in Las Vegas/Clark County can be a very beneficial decision. The search might be a bit more lengthy, but the rewards worth the effort. Good luck and enjoy your search. If you have a qualified agent helping you, it can be a very worthwhile adventure. I would be delighted to talk with you further. Please see my website for contact information.

The best for you.
Betty Gammon
0 votes
Oggi Kashi, Agent, San Francisco, CA
Tue Dec 27, 2011
I am assuming you are looking for desirable properties and/or locations. There is too much competition on these types of REO properties. Try going in with an all-cash offer if you can. Also have your realtor help you investigate the property as best as possible so you can make a clean offer.

Oggi Kashi
Broker Associate, Paragon Real Estate Group CA DRE 01844627
All data from sources deemed reliable but subject to error and omission, and not warranted.
0 votes
Myra Gouger, Agent, Las Vegas, NV
Tue Dec 27, 2011
Get an agent. View many properties. Put in an offer. Pray you get it. If you don't put in another offer on another home. After your offer is accepted, your agent does all the work to make sure that your home closes. No rocket science is involved. You just need an agent with experience.
0 votes
Rob Roy, , Las Vegas, NV
Tue Dec 27, 2011
Beth,

It is an extremely complex process, therefore, just by the nature of your question I would say you can't.
0 votes
Suzie Marqua…, Agent, Las Vegas, NV
Tue Dec 27, 2011
Beth
I would be happy to discuss the particulars of buying a foreclosed home with you. I have a great team that is experienced with purchasing foreclosed homes. I am available to answer any questions you have.
Thank You
Suzie Marquardt
702-234-7653
Fahrnyteam@yahoo.com
0 votes
This was my agent over 10 years ago when I bought my first home, I went through about 6 agents before her. She helped me to search the inventory of foreclosed homes and she made the completely daunting task so easy for my husband and I. I am also thinking of buying another foreclosed home again, and will for sure be calling her. Good luck!
Flag Sat May 26, 2012
Danya Gresham, , Las Vegas, NV
Tue Dec 27, 2011
Get an agent and make sure you have some realistic expectations and patience. We are at just under 3 months of inventory ight now with about 47%of that being short-sales...that just means that you are not going to be the only person looking at that foreclosure.

Get an agent though, really - and make sure if you're going after a foreclosure that it's an agent with experience with them...it's not just self promotion, really...you need to be able to write a strong offer to even have a chance and there are some agents who just haven't written and gotten accepted enough offers on bank owned homes to be good at it.

Obviously, if you have any questions or want more information, shoot me an email or give me a call. Good luck!

Danya
Danya@buyvegashouses.com
702-375-5438
0 votes
Matthew D'Er…, Agent, Las Vegas, NV
Tue Dec 27, 2011
Beth, there are a few types of foreclosures ( Hud, Bank Owend, Court House Auction) First thing we do is have you meet with myself and wife so we can talk about your criteria and goals are. Then we set you up with a custom search which will email you only foreclosures that match your criteria. You then let us know which ones you want to see and we make an appointment to take you on a tour to see them. If you find a home you want, we'll let you know what it's worth in todays market, what it will cost to repair and then will write an offer. Once offer is received we take care of all the inspections to make sure you're getting a good deal. You can close in 30 days or less depending on cash or purchase with a loan. We specialize in foreclosures and Hud Homes Sales. Hope to hear from you. Matt and Kim

Matthew D’Ercole
One Source Realty and Management
Cell - 702.501.0973
Website - http://matthewsellslasvegas.las.mlxchange.com
0 votes
Mary Kennedy, Agent, Las Vegas, NV
Tue Dec 27, 2011
You contact me your realtor and after finding out what you are looking for in a property ,the price you want to spend I can show them to you-
The inspection process is the same once you have an accepted offer-however in a bank owned property unless there is a problem with the gas-water-or electric the property is sold AS IS -
If a concern with the inspection you can cancel at this time.
If the property is okay with minor repairs only -we have our appraisal next if you have a loan and go to closing.
If cash the closing is within 15 days -if it is a conventional loan it takes 30 days.
There is a bit more involved but I willl discuss as we look at property.
mary.kennedy@remax.net 702-324-5390
0 votes
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