I am interested in purchasing a foreclosure condo in West LA, but being an amateur, how do I proceed, what are the pitfalls?

Asked by Susan Furuta, 90049 Sat Nov 20, 2010

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Scott Bingham’s answer
Scott Bingham, Agent, San Clemente, CA
Sat Nov 20, 2010
Step 1 - Get a pre-approval letter (or 2!) from a lender.
Step 2 - Decide what your criteria are for your home purchase.
Step 3 - Look at what's available online, http://www.bcre.com shows everything for sale in Los Angeles, Orange County, and San Diego.
Step 4 - Contact a realtor that can guide you through the process once you have a pre-approval letter.
This includes: checking out properties, placing offers, going through escrow, and clearing contingencies and disclosures.

I hope this was helpful!

Thanks, Scott Bingham Beach Cities Real Estate
Web Reference:  http://www.bcre.com
2 votes
Danny Patron, Agent, Campbell, CA
Sun Nov 21, 2010
Hire an Agent. (its at no cost to you, seller pays all commissions)
1 vote
Suzanne Gla…, Agent, Los Angeles, CA
Sat Nov 20, 2010
Hi Susan,
All are great answers below.
I'd only like to add that a common pitfall with buying an REO (foreclosed) property is that there are NO Seller Disclosures. The bank now owns the property, so there are no reliable disclosures they can provide as to the condition of the plumbing & electrical, any past or current leaks, foundation problems, repairs, defects, noise/neighbor/animal/traffic nuisances, etc... So you MUST do your due diligence with inspections.
With a regular sale, sellers are legally required to disclose all material facts affecting the property. If I were you, I wouldn't rule out looking at regular-sale properties, as well. If the seller is motivated, then you might be able to find just as good of a deal (if not better).
Please contact me directly if I can be of any further assistance to you.
p.310.383.1141 | http://www.LAVillageRealty.com
RealEstateSuz@gmail.com | lic # 01390707
(a division of Power Brokers Int'l | lic # 01520327)
1 vote
Daniel Casti…, Agent, Los Angeles, CA
Tue Jan 12, 2016
Hi Susan,

pre approval is number 1

I would be happy to work you. Please feel free to contact me anytime
if you have questions.
0 votes
John Sefton, Agent, Long Beach, CA
Tue Apr 5, 2011
Susan, try to find a real estate agent with experience in handling condos. There are many factors involved when dealing with Home Owners Associations, and in the current economic conditions, many HOA's are having difficulties that you want to be sure you are aware of up front.

You should not make an automatic decision that you want a foreclosed unit before knowing all the details. With all the publisizing of foreclosure bargains, there is a tendency for potential Buyers to believe that a foreclosure is going to be the best choice, but not necessarily. Keep a more open mind about it and get to know the market you are searching in.
0 votes
David Chiles, Other Pro, Los Angeles, CA
Tue Mar 29, 2011
Thank you for your question about purchasing a condo in West LA. The Westside is very nice, there is a lot to offer. According to a recent study 43% of short sales fail to close escrow. For whatever reason, there are a lot of pitfalls and the best way to avoid them is to have a lot of cash, go with a knowledgeable, agent and know exactly what you want.

In today's market you have to be comfortable with your decision to buy a property in any circumstances, win, lose, or draw.
0 votes
Lebau, , Los Angeles County, CA
Thu Mar 24, 2011
foreclosures are the only way to go right now. ive found a bunch of good info online. i would do some research online before getting locked in with an agent.
0 votes
David Cooper, Agent, Los Angeles, CA
Wed Mar 23, 2011
Dear Susan: Best education in Real Estate buying is Sunday open houses in the area you want to live in.
Bring a note book, your camera, ask lots of questions, write down lots of answers, take pictures of thje front of the house and match the notes to the house so you can remember on Tues what you saw on Sunday. This will give you a pretty good idea of the price range and then you can get preapproved for a loan at the price range.

David Cooper. Las Vegas Foreclosure Houses. FReee List. +1-7024997037
davidcooper@lasvegaswinner.org Not a Real Estate Agent. Investor in Single Family Homes.
0 votes
Philip Keppel, Agent, Burbank, CA
Tue Mar 22, 2011
Hi Susan,
If you are still looking to buy our office works with over 11 banks and all our agents are short sale and foreclosure certified. Feel free to check out our website to learn more or give us a call. Best of luck.
Phil and Jill Keppel
Web Reference:  http://philandjill.com
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Fri Jan 7, 2011
Hi Susan;
I have a lot of good material for a first time buyer, whether it's a standard sale, an REO (foreclosure) or a short sale. Now that January has arrived, those of us working in the REO and Short Sale market anticipate a lot of new properties coming on the market. You need to get ready by taking a few steps prior to writing an offer, not the least of which is to know your stuff!
I'd love to meet for coffee and have a chat with you about your goals for purchasing in 2011.
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) 818.564.6591
0 votes
Reid Kaplan, Agent, Los Angeles, CA
Sun Dec 26, 2010
Good luck, however it is important not to have tunnel vision and rule out a good deal on a short sale or standard sale. Standard sales have a lot less competition and sometimes equal seller-motivation with less of a headache and more transparency as to what you are buying. In Brentwood, there are few foreclosures and many qualified buyers, so I would expect you to be able to get just as good of a deal on a standard sale with actual disclosures, the possibility for the seller to pay for repairs, and fewer headaches.

Short sales, especially approved ones or ones that have been on the market a while can also be good opportunities. Beware of additional liens that can become the buyer's responsibility to be paid by cash at closing. Also list prices are likely to be artificially low in order to generate offers when first listed. The bank may not approve these at the list price. In addition, there may be many offers driving up the final price, so make sure to get good advice and bid appropriately.

A few pieces of advice to remember:
1. Patience and consistent follow up on short sales. Often they take so long that most of the first offerors have moved on by the time it is approved, so you still have a decent chance, even if you are not the first one in.

2. Make sure your offer is extremely clean, meaning no credits for closing costs and other extras (especially with foreclosures). It must also be submitted to the listing broker as one PDF file with all documentation and offer forms provided in an organized fashion THE FIRST TIME. This conveys that you are going to be easy for the listing broker/bank to work with and that you have nothing to hide. Many of the listing brokers are doing a lot of volume and dealing with multiple offers on many listings and will already have a hard time staying organized and do not want to do extra work to piece your offer together.

3. Work with a lender who is well known and respected within the broker community in the area where you are submitting the offer or be willing to be pre-approved by the listing broker's preferred lender. Do not work with your cousin's roommate's friend no matter what rate he says he can get you. Not all pre-approvals are created equal - the lender you go with makes a ton of difference.

4. Make sure you have a buyer's agent who is professional and who knows the right things to say to the listing agent to move your offer forward. By that, I mean they need to understand their motivations, know how to schmooze, and it helps to be well-connected. The professionalism will show through in the selection of the lender and in the way the offer is presented. Especially with distressed properties, when an overworked listing broker may be looking for shortcuts in choosing the right offer, this becomes very valuable.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Thu Nov 25, 2010
Hi Susan,
I see you are in 90049 area we do have short-sale and some REO property in Playa Vista for sale. There are certain requirements for purchase on these properties. If you are thinking of homes in WLA one of the biggest issues is the condition of the property. When you interview and hire your excellent Buyer Agent they will help you every step of the way.
Web Reference:  http://www.doreneslavitz.com
0 votes
Heather Paul, Agent, Santa Monica, CA
Tue Nov 23, 2010
First and foremost, I would always recommend to hire a Realtor, they will be looking out for you and YOUR best interests. They will also help you negotiate the best terms for you, the bank has a Realtor that represents them and will be trying to negotiate the best and highest price for them. Now is a great time to buy with outstanding home prices and interest rates that are extremely low. I commend you on looking to purchase a home right now. I specialize in foreclosures, feel free to contact me anytime with questions you may have.

Have a great day,
Heather Paul
Coldwell Banker
0 votes
David Cooper, Agent, Los Angeles, CA
Sun Nov 21, 2010
Be more specific in what you want. Foreclosures do NOT come with a pink ribbon tied around them saying "steal me" You are in competition with every other bargain hunter out there, and in this market, that means EVERYBODY.

What is your price range?
What is your credit score?
How much cash do you have?
Do you want move-in condition or can you handle a fixer upper?
0 votes
Shawn Poureb…, Agent, Los Angeles, CA
Sat Nov 20, 2010
Get a good, honest, reliable Realtor who guides you through the process, get a good lender or a Mortgage Broker. Call me I'll be happy help you and to make it a very smooth transaction.
Shawn Pourebrahim
Keller Williams Realty
0 votes
Jayne Clement, Agent, Los Angeles, CA
Sat Nov 20, 2010
I agree with RJ..."first get a reputable Buyer's Agent!" Don't play commando style and go it alone...good representation will make your deal very smooth. REO's (bank owned homes that were foreclosed) are generally easier to buy than short sales. Your agent will assist you in making offers, researching the comps, what to look for and what to avoid, getting a good inspector, or how to get out of the contract if the inspection reveals the house to be too much of a fixer for you.

But, don't be dissuaded by short sales....there are GREAT deals out there right now, in every area and especially with the holidays looming. Short sales are also bought "as is," but they just tend to take a bit longer than REO's. These days, buying and selling distressed properties is at least 50% of my business. In 2010, this is business as usual. ;-)

Feel free to call me if you want to pick my brain for ideas!
Jayne Clement
Keller Williams
0 votes
Richard "RJ"…, Agent, Beverly Hills, CA
Sat Nov 20, 2010
First... get a reputable agent. Next, figure out how much you want to spend on payments. Contact a lender if you are getting a loan and apply for a loan. This will tell you how much you need to make a purchase and how much you can expect to pay monthly. It is important to do this up front... this way, you will not get your heart set on something you may not be able to afford and it will let you agent, the seller of a property and their agent know you are a serious and qualified prospect.

As far as the property goes... if it is a foreclosure, expect to be purchasing the property, as-is. Meaning whatever could be wrong with it, you are accepting. There are outs, but just know this up front. Once you have made an offer, and you are accepted, unless you change the terms of the contract, you will have a 17 day inspection period to check the property. Hire a good property inspector. Follow their advise. If they suspect something, they will tell you in their report and may recommend hiring specialists to further inspect something "fishy"

My best advise right now would be to work with an experienced agent who can guide you step by step. I am one if you have not found one yet. You need a patient and experienced Realtor who can assure you along the way.

Always happy to assist.
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes
Janey Bishop, Agent, Encino, CA
Sat Nov 20, 2010
Get a good realtor, a good inspector and a good loan officer which you should use in any purchase of real property.
0 votes
John Barry, Agent, Eagle Rock, VA
Sat Nov 20, 2010
Hi Susan,

You should first speak to a lender and get pre-approved for a loan, and also find a good buyer's agent to work with who can guide you and help you through the process. Buyer's agents are customarily paid by the share of the commission from the seller, so as a buyer having expert representation is available at no charge. Being pre-approved for a loan is important because not only will it give you an idea of the price range in which you should be looking and which you would feel most comfortable, but also because most sellers will require a copy of your loan approval to be included with any offer you make. A good agent will be able to show you the available homes that meet your criteria and help you view any of them, plus negotiate the purchase and prepare the contract paperwork for you. They will also help you help you navigate through and avoid the potential pitfalls along the way.

One thing you should look carefully at when purchasing a condo is the financial stability of the homeowners association and the number of vacant units in the complex, as these could have negative financial implications on you as a homeowner in the future.

Good luck!

John Barry
DRE #01856079
Coldwell Banker Residential Brokerage
Cell: 323-810-7976
Email: john.barry@coldwellbanker.com
Facebook: http://www.facebook.com/RealtorJB
Twitter: @RealtorJB
0 votes
Jeffrey White, Agent, Beverly HIlls, CA
Sat Nov 20, 2010
Well, there are definitely a few areas to be concerned, but primarily it is the state of the HOA and if they are in good standing. This can greatly affect the ability to get financing. You also want to make sure you have good representation so that your contingencies are protected and you have a realtor working just for you. Thus is always the case, foreclosure or not. Biggest concern of all though is solidifying your financing. Give me a ring anytime and I'd be happy to consult with you about this interest in purchasing a condo!

Jeffrey White
Keller Williams Beverly Hills
0 votes
JB Fung, , Los Angeles, CA
Sat Nov 20, 2010
Hi Susan,

Step 1 is to choose a realtor to guide you with the search and guide you on the purchase offer and escrow.
Step 2 is to get pre-qualified for a home loan, which a realtor can refer you to a professional & reputable lender.

I would be happy to help you with this process, please feel free to contact me on my cell to dicuss.

JB Fung
Sotheby's International Realty
Direct 310-888-3847
Cell 323-687-1170
Fax 323-927-1650
DRE# 01332492
Web Reference:  http://www.jbfung.com
0 votes
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