Your best bet is to start working with a licensed Realtor or Mortgage Banker for identifying a distressed property. Realtors will have access to the MLS listing the Short Sale and Foreclosures, while a Mortgage Banker (and some Realtors) will have access to the Bank's own databases of REOs. Iâ€™m both a Realtor and Mortgage Banker with access to these data sources.
GUT CHECK PLEASE!
However, while you might identify a Rose out in the Foreclosure garden, you should be fully aware of where the thorns are located that the media rarely covers when they are hyping these opportunities, as follows:
-- The process of buying a Short Sale/Foreclosure/REO (SS/F/REO) home is much slower (60+ days), and greater-than-normal documentation is required, as compared to buying from a private seller.
-- Most banks are notorious for NOT returning phone calls and obtaining status of the transaction is like shouting into a valley and not even hearing your own echo. In all fairness, Banks are inundated right now.
-- Only about 33%-50% of deals are actually accepted and close.
-- Water and/or electricity can be turned off, which makes it very difficult to confirm condition. Thereâ€™s also not much effort to clean up or repair SS/F/REOs. They can be in pretty bad shape. Be careful of SS/F/REOs priced suspiciously low as the completed cost of the repairs may exceed the market value of the home after the repairs are done. Definitely consider finding a contractor you can trust and take her/him with you when you are viewing SS/F/REOs. True, some foreclosures are in better shape than others, and just when the excitement builds you realize you are going to be up against a 60-day bout of the Bankâ€™s â€œsilent treatment.â€ This is why many buyers â€œjust say noâ€ to SS/F/REOs, opting for a condition-verifiable, MLS listed home that is competitively priced.
If your stomach isnâ€™t queasy and you want to move forward buying one of these properties I would suggest that you ask your friends and family for references of at least three people that have actually run the SS/F/REOs gauntlet.
On the other hand, if you are thinking, â€œjust say noâ€ and would like to find a condition-verifiable home that is competitively priced please give me a ring.
Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTORÂ® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist
Steven Anthony Real Estate & Financial Services
Cell: 510.461.6011 Skype: brokersteve