I have a couple of general questions regarding foreclosures... 1.) Are you able to actually walk through

Asked by Christina, Dacula, GA Thu Jun 4, 2009

and see the inside of the house?
2.) Are we able to do a title search to make sure there are no liens, etc...
3.) Is there any reason I should NOT buy a foreclosure? The prices are just amazing out there!

Thank you in advance for your help! This site is awesome!!!

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The Messersc…, Agent, Buford, GA
Thu Jun 4, 2009
1. In order to view a foreclosure, you will need to schedule an appointment with a realtor. It is best to have a Buyer's Agent represent you in your home purchase, including a foreclosure, so that your best interests are being protected. What I mean by that is that a good Buyer's Agent will include contingencies in the contract such as financing, appraisal and inspection. That agent will also do a comparable market analysis for you so you can see what similar houses have sold for in the past 3-6 months. This way you will know you are getting a good value.

The attorney will do a title search as they do for all home purchases.

Buying a foreclosure has its positives and its negatives, just like any purchase. Many, if not most, foreclosures are in disrepair and will need cosmetic work, if not more. However, there are some that have been well maintained. The condition should be reflected in the price. You need to consider if you have the time, money and/or energy to complete the repairs needed to make a property a home you'll be happy living in. You will not get a seller's property disclosure like you would with a house being sold by the owner, since the bank that owns the property has never lived there.

There are addendums to the contract that will over ride some of the provisions in the standard GAR contract. They vary but typically protect the seller. The one "gotcha" that is very common is the per diem charge. This is where the buyer is charged $100 or more per day if the property does not close on time (unless it is the seller's fault). That is one reason it is good to schedule your closing 45 days from binding agreement date. That will give you plenty of time. But if you are competing with other offers, a quicker closing may be looked on more favorably by the seller.

There are some very good buys in new construction that the builder has been unable to sell. There are also motivated sellers that have to sell, due to being tranferred or having already bought another home, divorce, estate sales, etc.

I recommend you work with an experienced Buyer's Agent who will show you enough homes that you will recognize a great deal when you see one, without anyone having to tell you. Once you have seen enough homes you will easily recognize which ones are overpriced and which ones are priced to sell.
2 votes
Charlotte Cl…, , 30506
Wed Jun 10, 2009

Not all foreclosures are created equal. The answers you have received already assume that you are talking about properties that have already been foreclosed and have gone back on the market as an REO property (now owned by the bank who foreclosed) and have been listed with an agent. That is generally where you will find the lowest risk opportunities in today’s market.

If you are talking about getting into a house that is being foreclosed and will be sold at auction on the county courthouse steps on the 1st Tuesday of each month, it is totally different! Generally you will not be able to get into the property prior to the auction sale because it is still owned by the party being foreclosed. That person may or may not have it listed for sale prior to the foreclosure sale (trying to sell it themselves and avoid foreclosure).

I would caution you against trying to purchase a true "foreclosure" at the 1st Tuesday auction. This process can be very risky. In this case, you would have to do title work on your own prior to bidding for the house to determine any title issues in advance. These foreclosure auction sales are also on a cash basis, so you have to come with a big certified check- no loans allowed! You may also end up having to evict the people who are being foreclosed on. If you can't gain access to the property prior to the auction, you risk potential problems with the property that might have been revealed by an inspection. All these issues can be time consuming and costly.

In today's market of quite a few REOs, your best bet lowest risk option is to look at the properties after they have been foreclosed and put back on the market by the bank. There are lots more of these opportunities out there than there were in the past. These kinds of deals used to jump off the market quickly and were more difficult to have a chance at. The best condition and best priced ones still do, even today, so it is important to keep tabs on the market daily or have someone doing it for you to get the best opportunities. It is not uncommon even in today’s market to have multiple offers on the best of these REO properties, so you need to have your act together and have an agent who can help you navigate the process with the best chance of getting your offer accepted. Generally the banks have already evicted (if necessary) the people who have been foreclosed. In the current market, some banks are even making repairs to the property and offering other incentives such as low interest financing to try to move their bank owned properties. The state of Georgia is even using "stimulus" money to encourage the purchase of some of the less desirable foreclosures out there. The Georgia Dream program offers a $14,000 grant (free money!) to income-qualified buyers who purchase a foreclosed home in Georgia. Don't forget the tax incentives too- Georgia recently passed a home buyer tax credit of $1,800 for all home purchases this year, and the federal tax credit of $8,000 is still available to first time buyers or buyers who have not owned a home in 36 months.

Financing is certainly not as easy to get today as it was just a year ago, but it is still out there. If you have good credit and verifiable income, you probably can get a loan. It is really important to start that process early though- even before you find a house. It can take even a good loan officer a few days to determine if you can get financing in today’s volatile market, so start early. You need to be prepared to jump on the right opportunity when it comes along and not have to be fumbling around to figure out if you can get financing. Be prepared!

The bottom line is that there are lots of really great opportunities out there today if you know how and where to look for them. In some cases you can combine tax credits, incentive grants, below market prices and below market financing offered by the owner-banks to create one unbelievable package! Arming yourself with patience, knowledge and persistence can pay off in a great deal on a good opportunity!
1 vote
Stephanie Mc…, Agent, Canton, GA
Thu Jun 4, 2009
Hi Christina. I can only think of one reason you shouldn't buy a house right now and that is if you are not financially ready for it. You are so right - I'm not sure that prices and opportunity for residential real estate will EVER be better.
I have an attorney who runs title for me free of charge so my buyers don't have to wait until they have already negotiated a deal and applied for a loan to learn about title issues. Most of the banks will pay for the title work AND pay for title insurance covering the buyer so there is protection for you.
It is not advisable to enter properties alone - there have been alot of crimes reportedly taking place in vacant and foreclosed properties, and neighbors may be skittish and call the police if they see you walking around. It is best to work with a buyer agent who can verify showing instructions for the property and actual availability - just because the listing is still active does not mean that the foreclosure is not already under contract. I closed a foreclosure this week that was a large home with acreage and the listing remained active throughout our escrow.
If you are ready for some professional help, contact me by private email and we'll get started.

Stephanie McCarty, Accredited Buyer Representative
REMAX Greater Atlanta
404-457-8089 cell
email to rmga14@gmail.com
Web Reference:  http://www.mysouthhomes.com
1 vote
Joshua Jarvis, Agent, Duluth, GA
Thu Jun 4, 2009
1. Yep! You usually need a realtor to let you in. Some foreclosures are wide open, although I don't recommend breaking in.
2. Title searches are preformed by the attorney for your lender in Georgia. No worries there, your lender won't give you any money if there are liens. In addition, you'll want to buy title insurance to cover you just in case.
3. NOPE! Foreclosures are great and they make up most of the market in Atlanta, so get to it!
1 vote
Cheryl Hutch…, Home Owner, 30501
Thu Jun 4, 2009
Hi Christina,

You don't have to worry about getting a title search. After you make an offer and it is accepted and the loan has gone through processing, the attorney who will be conducting the closing will perform a title search and make reasonably sure that there will not be any liens or title issues. You won't be purchasing a home with existing liens on it unless the seller satisfies the liens first. You will be able to purchase at closing, a title insurance policy to protect you after you buy the house. You don't have to be afraid to purchase a foreclosure. You do need to make sure you hire an excellent inspector to inspect the house and its systems. A good Realtor can recommend inspectors to you. Ask your friends for a recommendation for a good Realtor. You really need a great Realtor to represent you in the transaction. Someone with lots of experience and someone who cares about their clients and takes good care of the. Also Christina, don't limit yourself to foreclosures. Because there are so many foreclosed homes out there, they are dictating the market right now. You may be able to get a fabulous deal on something other than a foreclosure. Focus on getting a home you love that is in a good neighborhood, one that will be an excellent investment for you. Your Realtor can help you determine which houses will be a good investment. If you need anymore info, feel free to call me anytime.

Best regards,
Cheryl Hutchinson
Century 21
Realtor / Loan Officer
Web Reference:  http://www.ChooseCheryl.com
1 vote
Laura, Home Buyer, Gainesville, GA
Tue Jul 10, 2012

I had the same questions as you a couple of months ago and now I'm two weeks away from closing on a bank owned foreclosure.
I had no buyers agent, I asked alot of questions and did alot of research.
My advise to you is, get a prequal letter from your lender. You need to know what you can afford before you make an offer. There is little time to waste once you find what your looking for.
Figure out the area you want to live in and drive around, call agents, check websites everyday. Sign up for new listing alerts that are sent to you everyday.
When you find the house make an offer, don't be afraid to ask for closing costs help, if the carpet needs replacing or the walls need painting, they may work with you. Once your offter is accepted and you have a contract, get the house inspected you only have 7 - 15 days to back out before losing your earnest money.
My whole process has gone quickly and smoothly. I don't think I could have done any better with an agent. Nobody is going to work for you like you for yourself! Good Luck
0 votes
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