I'm a first time homebuyer interested in the pre-foreclosure market. Is this really a feasible way to get a?

Asked by Matt, Portland, OR Tue Apr 22, 2008

home below market value? What do I need to know?

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Jesse Knight, Agent, Lake Oswego, OR
Thu May 1, 2008
Keep in mind that the words "foreclosure" and "pre-foreclosure" are not synonomous with "deal". Just because someone hasn't paid their mortgage on time, that does not necessarily mean that the home will sell below market value. In fact, many pre-foreclosures are from borrowers with 100% financing, who have no equity in the home and therefore cannot sell the home for less than they bought it, without bank approval...hence the short sale.

Yes, you can get a good deal with a short sale if you're patient and willing to do the leg work and deal with the competition. Having cash would help your cause greatly.

The other way to do it would be to look at the current inventory and find a home that you feel is priced right or under market and make a deal that way. A good deal is NOT getting a home for less than the asking price, it's getting a home for less than market value. If you get 5% off an over-priced home, you still might be paying too much. If you pay full price on a well priced home, you're getting a good deal. Point is, think about the overall value, not just the price below asking.

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Wendy Boso, Agent, PLTD, OR
Tue Apr 29, 2008
The answer you are looking for is YES. There is a way but you will have to be very paitent because you are now working with the banks timelines and not the seller's. The offer will be written and sent off to the bank who will accept or reject it based on their oppinion of the current market, other comparables, time on the market, and their holding costs. So yes there are some great deals out there and working with a realtor and lender will help. Securing those realtionships at the beginning will probably steer you towards a great deal!

Wendy Boso
John L. Scott-NE
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Cricket Fors…, Agent, Portland, OR
Tue Apr 29, 2008
The short sale market (where homeowners owe more than what the homes are worth) continues to grow across the country. Portland Oregon is no exception and there are deals to be found buying a home this way - but as others have said -- be patient. You will have to wait and wait and no sale is guarenteed until the lender says so. Banks are in no hurry to loose money. They won't help with repairs either - keep in mind, if the homeowner couldn't afford to keep up his mortgage payment, you can bet he wasn't spending money on home maintenance.

My advice... Find a Realtor who is experienced with foreclosures and short sales. There are more hoops to jump through than a "regular" purchase and having someone who can guide you through the process will save you valuable time and money. The Bank who hold the mortgage don't have to play by the same rules as a homeowner does and understanding this up front is important.

The current Portland market if full of deals! Don't look only at short sales -- you might be missing a great opportunity. Not to mention - you might be able to work home repairs into your deal - where you could come out ahead in the long run!

Cricket Forsey
Keller Williams Realty
Portland Premiere
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James White, Agent, Tualatin, OR
Wed Apr 23, 2008
I've bought and sold foreclosures in Portland and around the country for years. If your interested in getting a good deal it's important to know what your going to do with the property turn it for profit, live in it, rent it etc. Also are you handy, no doubt the home will require repairs. If you want a list of Foreclosures sent to you or you just have questions visit my website or give me a call at 503-539-3819
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Pacita Dimac…, Agent, Oakland, CA
Wed Apr 23, 2008
There are good deals around.....but make sure you are prepared; i.e.c, you are preapproved, you have adequate cash for the initial deposit (usually 1-3% of purchase price), a reasonable down payment (gone are the days of 100% financing) and that you are patient. Although a seller can accept your offer in mere days of submission, it may take 30-45 days before the lender, who has the final decision, responds. And the lender can accept, reject or counteroffer --- and that will take more days.

Here's a really good source of information on foreclosures and short sales ---- the basics, process, expectations.

There are other links to more stories....take the time to get educated about this process.

Good luck!
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June Lizotte,…, , Portland, OR
Wed Apr 23, 2008
Matt, If you are in a hurry and anxious to get into a home then the short sale market is not going to be to your liking as they typically can take several weeks or even months. Some banks are better to work with than others. If you have just started the process I would suggest you take the time to call an agent (I would love to help) and have a very thorough conversation about the home buying process. There are many things to discuss for the first time buyer. Please feel free to check out my quality service credentials at http://www.qualityservice.org. You can put in my name June Lizotte and the state Oregon. You'll see a platinum award, meaning 100 percent of my closed deals had clients who indicated 100% satisfaction. Some of them were first timers. Some were seasoned home buyers/sellers. You can also check out every home on the Portland and surrounding market on the web link below or http://www.junelizotte.com
Web Reference:  http://mynexthousenow.com
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Dirk Knudsen, Agent, Hillsboro, OR
Tue Apr 22, 2008
Matt ...

If you are buying a pre-foreclosure deal be prepared for competition. We have out bids on about 5 for clients in the past weeks and have got 2 deals through. There was anywhere from 3-9 offers and it actually drove the prices up to where the homes were just ok deals.

What Rick said is correct. Be Patient. The Banks will take their time and they know they are going to get you sweating over the deal. So hang in there.

Let me propose something totally off the wall. Get a good agent and work the base of existing homes for sale. Many sellers are in the mood to deal. And frankly almost everything I see looks like a "good Deal" in some way. There are some exceptional values and they are selling in 1-5 days. They stand out from the rest. So get an agent, get good updates on new homes, and go to work!

The good values will stand out foreclosure or not. Be an active Buyer!

I hope that helps.

Best wishes to you;

Dirk T Knudsen
Re\Max Hall of Fame
#1 rated Production Re\Max Team in Oregon
Web Reference:  http://www.nwhomecenter.com
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Rick Sadle, Agent, Portland, OR
Tue Apr 22, 2008

The short answer to your question is yes. This is definitiely a feasible way to get a "deal".These types of sales are usually called "short sales". This is where the owner is behind in his/her mortgage and owes back payments as well as late fees and other fees sometimes resulting in a situation where they owe more than the home is worth. The lenders will sometimes take a significant loss to get the home sold before they are forced to foreclose (Lenders are not in the business of owning homes). A lot of the time this results in the home being sold for less than market value.

The key to finding a deal in the pre foreclosure market is having lots of patience. Dealing with banks can sometimes be very frustrating. A good real estate agent with experience dealing with short sales can really help.

We have lots of experience with short sales. Let me know if my team can be of any assistance or if you just have questions that I can answer.
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