how do you know what you are getting on forclosure or short sale?

Asked by gepsmith, Riverside, CA Fri Jun 8, 2012

as is a little scary

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Ray Wright, Agent, Riverside, CA
Sat Jun 9, 2012
A very simple answer would be: Get a home inspection! Don't be afraid to make an offer because you have a built-in time period in the contract to inspect and investigate. When we first see a home, I always look for the issues that could be of concern to my buyer and I point them out before we make an offer. Once the offer is accepted and we open escrow, a professional inspector goes out and provides a detailed report of all the issues they've uncovered. At that time, the buyer decides whether to proceed or not.

It's a Seller's Market and the good homes are going fast with multiple offers. Many times I walk in to a home and immediately point out to my buyer issues that may want to make them pass and move on to the next home. Your Realtor can help you navigate the territory of what homes to make offers on and what to offer.

If you're not working with a Realtor, I suggest you get one right away. With interest rates the lowest ever and prices on the climb, NOW is the time to buy! The FIRST and foremost step in purchasing a home is to get with a Realtor. Check with friends and family to see if they can refer someone to you or research sites, such as this one to find a good professional Realtor. Your SECOND step is to get pre-qualified for a loan. AFTER you find a Realtor, he or she will have you meet with the lender that he or she uses regularly. This is important. Please let me know if I can help or if you have any more questions.

Good luck!

Ray Wright
Keller Williams Realty
2 votes
Kevin Allen, Agent, Riverside, CA
Sat Jun 9, 2012
You have received much good advice here so far. The key is your contingency period (the period that allows you to withdraw from the transaction without forfeiting your earnest money deposit). In CA, the standard is 17 days, although many banks in a foreclosure lower that period to only 7 or 10 days.

The advice that will not work in the Inland Empire economy is inspecting before offering and basing your price on the worst-case scenario. You would become a full-time house-seeker instead of a home-owner.

We are in a strong sellers market with the average home getting 5-10 offers or more in the first week on the market. We have the lowest inventory of homes in the last 5 years. Most homes are selling for over the asking price. A good, local realtor will be able to guide you into finding a home that is likely in great condition and refer you to a skilled home inspector that can quickly and competentely advise you whether it is wise to continue your purchase, renegotiate the price, or withdraw the offer to reclaim your earnest money deposit.
1 vote
Suzanne MacD…, Agent, Succasunna, NJ
Sat Jun 9, 2012
A foreclosure or a short sale are no different than any other real estate purchase with two exceptions, first you have to negotiate with the bank, not just the owner; and second, you are most likely buying the property 'as is'. 'As is' means the owners, whether the bank or not, is not going to do any repairs to the property, you take it as you find it. Therefore, it is important to base your offer on a 'worst case scenario' and assume EVERYTHING is wrong with the house. Next you need to do your home inspection right away, don't wait for the bank to accept your offer. This is important because the bank will most likely try to negotiate the price and YOU need to know exactly the condition of the home so you can know whether to give a little and increase your offer or whether to stand firm. Having a professional opinion as to the condition of the home can be a very powerful weapon during the negotiation phase of these purchases, so don't hesitate to take a chance and spend the money. It will pay off in the long run.

Short Sales and foreclosures can provide a wonderful opportunity for buyers to get a very good deal but you need to work with a realtor who is experienced in these transactions and you need to listen to their advice and do exactly as they say. If you do, you'll be fine.
1 vote
Harold Sharpe, Agent, LAKE HAVASU CITY, AZ
Tue Jun 26, 2012
On a short sale, the sale is just like an ordinary sale when it comes to the seller disclosing to you about the property. On a foreclosure that is not the case.
All properties are sold as is.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
California Department of Real Estate Broker License # 01312992
0 votes
Judi Monday,…, Agent, Green Valley, AZ
Sat Jun 9, 2012
Be sure you have the property thoroughly inspected before you close on a foreclosure or short sale--while the lender may not be willing to make repairs, they can't prevent you from getting the home inspected and walking it you don't like what you find.
0 votes
Cindy Davis, Agent, San Diego, CA
Sat Jun 9, 2012
If i understand your question correctly, you are referring to the condition of the property...

You always, always, always, want to have a property inspection completed on whatever home you buy. The California Purchase Contract has a contingency clause built into it for properly inspections. If you get one one done and are unahppy with the condition, you have a certain period of time (usually 17 days) where you can cancel the deal and get your deposit back.
0 votes
Scott Godzyk, Agent, Manchester, NH
Sat Jun 9, 2012
Simply you have an inspection and you research the deed. A good and well expereinced agent can guide you through the bank owned home purchase process.
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0 votes
Bill Eckler, Agent, Venice, FL
Sat Jun 9, 2012
Yes, embracing the unknown can be freightening.

When possible, we would recommend taking a friend that has a working appreciation for the various home systems and how they operate. They will be able to help you with formulating a basic appreciation for the condition of the property that may assist you moving forward or eliminating this possibility.

But the most important factor you have is the ability to conduct various inspections in an effort to identify those things that may need to be addressed before buying a property. Be sure that the wording of any purchase offer protects your right to withdraw from the agreement without penalty should excessive repairs be required.

Hope this is helpful.

0 votes
Cindy Vedder, Agent, Irvine, CA
Fri Jun 8, 2012
It is a little scary. But you have all the same options as a regular sales as far as performing your due dilligence. You get to do your professional home inspection. You get to have a professional appraisal. You get to walk if you don't like what you find and/or further negotiate. Have a professional realtor walk you through the process and you'll be glad you did. Best of luck and congratulations - it's an awesome time to buy!!

Cindy Vedder
Prudential Ca. Realty
0 votes
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