What is the best way for a regular home buyer to purchase a foreclosed property?

Asked by Johnnie Crowder, Chicago, IL Sat Mar 28, 2009

It seems as if investors are swiping up foreclosed properties before a regular buyer can submit an offer even though these properties appear on websites. How does a regular buyer access foreclosed properties?

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5
Jo Shaner, Agent, Memphis, TN
Fri Apr 10, 2009
As a REO listing agent for several large companies - I hear your complaint over and over. The folks below all have given you excellent advise.

First, be ready with your financing.

Second, enlist a Realtor that can put you on a hot sheet for the area and price you are looking for. It will automatically update you when new listings go up. Remember, most of the information from public sites are dated before they hit cyberspace and into your computer.

Third, find the REO (real estate owned) specialist in the area you want to buy in. We know about houses coming down the pike - going through the foreclosure, cleanout, repair and appraisal process. In most cases I have knowledge of a future listing weeks before it hits the MLS. If I know you are looking to a certain type of house......I'm going to enlighten you about it. My banks want me to also. I get more listings the faster I can get them off the books. In some cases these agents will have special websites for future listings - just ask around when looking for your Realtor.
Web Reference:  http://www.lipseyshaner.com
0 votes
Joe Spake, Agent, Memphis, TN
Sun Mar 29, 2009
I believe that a buyer looking for a home to live in, and an investor are 2 extremely different types of real estate clients. First, find a good real estate agent, who knows about foreclosure sales. I have had a number of successful sales with "regular" buyers, so it definitely can be done. I would suggest:
1. Get prequalified with a reputable mortgage company and let them know you are thinking of a foreclosure purchase.
2. Be aware that foreclosures are "as-is" sales. There are mortgage programs through FHA to do repairs and roll them into your price. Ask your mortgage person and real estate agent about this. If they don't know, find someone who does.
3. Be prepared with your earnest money and the bank's pre-approval letter.
4. If the house is new on the market, be prepared to make your best offer quickly.
5. Foreclosure properties require much more paperwork than normal sales; make sure your agent advises you as to what you are committing to. (penalties, etc.)
6. Remember foreclosures are AS-IS. If you don't want to deal with flaws in the property or if you expect the seller to fix things (there are a few exceptions here) you might want to consider a normal sale.
Web Reference:  http://spake.com/connect.htm
0 votes
Lisa Santaca…, Agent, Las Vegas, NV
Sat Mar 28, 2009
Johnnie,

Terry is right, you must be willing to move quickly and wait patiently with a foreclosure. Often times foreclosures come on the market and within days there are multiple offers. I have certainly had my share of clients that have been a day late. Always be prepared to write an offer at a moments notice especially if it is that "perfect" home. Keep in mind that you will have a due dilligence period (time to back out) when your offer is submitted and bank acceptance has been received. Within that due dilligence time frame (generally 7-10 days) you will conduct your inspections and secure financing (if needed), you will also have an out should you change your mind. I will warn you, if you are pull out of a deal within your due dilligence period based on inspections or lack of financing you must be willing to supply supporting documentation ie; decline notice or the summary section of your home inspection.

Good Luck!
0 votes
Gerald Willi…, Agent, Germantown, TN
Sat Mar 28, 2009
Johnnie,

The best way to purchase any property is to contact a local realtor they can research and present these properties to you. They can identify the properties that will fit within your budget, desired location, and other requirements.

Gerald Williams
Affiliate Broker
Mortgage Loan Officer
BenchMark Realtors, LLC
BenchMark Mortgage, LLC
901-413-2233
gh_williams@yahoo.com
0 votes
Terry Longmi…, , Memphis, TN
Sat Mar 28, 2009
Johnnie,
It has gotten very competitive out there in the foreclosure market; you will have to be patient and aggressive. When properties are priced well below value the investors and owner occupants are getting in bidding wars over them and the owner occupant should win over the investor because they want to buy at a level that will make a profit. If you plan to live in that same property you should be willing to pay more than the investor because you will be looking for long term appreciation rather than short term gain. Get a good Realtor to keep a watch on the area’s that you want and be ready to move when he calls. If you wait in this game you will miss good opportunities but there will be more just be smart and patient and listen to the professional.
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