1st time home buyers need advice/information/Agent for preforclosed property purchase?

Asked by Katherine, San Diego, CA Fri Feb 8, 2008

Mission Valley area. Because we like the community and where we live, we are hoping to buy something here. However, our budget is slightly less than the typical sale price here. But, with the market being what it is, we've found some preforeclosed homes that come in right at our price... anyone know who is the right person to get in touch with to aid us in the process? We'd like to use a legitimate Realtor to find out more about these properties. Also, as first time buyers, is a preforeclosure deal a bad idea?

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15
Larry Hotz, Agent, Cherry Hills Village, CO
Sat May 24, 2008
Katherine, the most important thing to do before you look at homes is to interview potential Realtors. That's right. You are the employer and you get to interview potential candidates to be your Realtor. I suggest having a written list of questions and ask the same questions to each candidate.

I agree with Dan. I know that Bob Wilson is an excellent Realtor in your area. He does specialize in foreclosed homes and short sales. Many Realtors are frustrated with these types of sales and discourage home buyers from pursuing them. I know these are more difficult transactions. Still, you probably want to choose a real tour who will at least show you foreclosures and short sales and feel comfortable working with them.

The article below was written by a first-time buyers agent and has many ideas which you may find helpful.
2 votes
Sarah Dupree, Agent, Carlsbad, CA
Thu May 15, 2008
Pre-foreclosure homes (usually a short sale) are a bit of a headache. Oftentimes, an agent will list a home for less than the loan on the house. This is called a short sale. What a lot of buyers out there don't know it that the lender(s) has to appove this amount for the sale to go through. MOST of the time the agent does not have an approved amount but lists the property at a price that will sell. Once both buyer and seller agree on a price and sign a contract THEN it has to be submitted to the lender for approval. This process of weaitng for an answer can take weeks. In addition, the lender will have you sign additional legal documents limiting buyers rights and remedies. If you wait till the bank owns the house you will sign similar "addendums" which are very one sided (for the bank) and the lender (who is now the seller) is under no obligation to disclose anything wrong with the house. CA law requires sellers to sign very lengthy disclsure documents telling the buyers every little thing wrong (or ever was wrong) with the house to their knowledge. REO (lender owned homes) are exepmt from this state requirement so often buyers are in the dark as to any material defects in the home. Caveat Emptor (buyer beware). Short sales and REOs can be great deals but they are somewhat risky for an uniformed or inexperienced buyer. Not for the faint of heart.
1 vote
Jim Walker, Agent, Carmichael, CA
Fri Feb 8, 2008
The article linked below tells you a little about the patience and risk tolerance required from a buyer in a short sale situation. My opinion of short sales for buyers? High Risk, Low Reward.

http://www.brokeragentnews.com/news/residential/2008_2/2_4_2…

To sum up the article. 1. Buyer waits a long time for the bank to anything. 2. Buyer has to sign banks counteroffer that is full of anti-consumer clauses. 3. Buyer has to pay nearly full market value. (discount, if any is much tinier than you think it will be) 4. Bank can cancel the sale at any time up until close of escrow, with no consequence to the bank and no compensation to the buyer.
1 vote
Jhansen, , San Diego County, CA
Fri Apr 2, 2010
For all of those first time homebuyers, now is a great time to buy. You have the Federal tax incentive until April 30, 2010 and Starting May 1st is the California home buyers incentive. Start looking to get ahead of the competition! You can get free foreclosure lists at: (click on the bank owned/foreclosure box)
http://www.bigredhouses.com
Web Reference:  http://www.bigredhouses.com
0 votes
Dan Connolly, Agent, Atlanta, GA
Tue May 13, 2008
You may think it is strange that an agent from Atlanta GA would answer your question, but I know an agent who happens to be specialize in short sales in San Diego who could definitely help you in your quest. His name is Bob Wilson and you can find him at the link below, or just type in "San Diego Real Estate" on Google, his site comes up first!
0 votes
A, , San Diego County, CA
Tue May 13, 2008
My advice...don't mess with the pre foreclosure short sales. Why? you are not going to get a below market value deal. Wait till those short sales turn into Bank Owned...then wait until they have been on the market for at least 30 days to get the best deal done. If you would like any help finding out houses that will be htiing the market via bank owned in the near future, fell free to contact me:
Alison Bell
619-384-6997
http://www.abellre.com
0 votes
James Baxter, Agent, Encinitas, CA
Tue Mar 4, 2008
Hi Katherine,
To answer your question on preforeclosure. Your best bet is to get your hands on a NOD list, I can supply them to you if you would like, or just about any other competent Realtor for that matter. You can also join a list company such as countyrecordsresearch.com they charge about a $100 a month for each county you want. Than go out and pound the pavement. You will need to go knock on doors and talk to people. What you will find is that most people do not want to talk to you. Bottom line most people are in denial. They think some higher being will save them or they will win the lottery. (no joke, these are honest to god answers I have heard well door knocking)
It is a lot of work for little reward. Are there deals out there to be had? yes, but they are not easy to find.
If you would like to talk more give me a call.
There is way to much to talk about on this subjust than I could ever type in this forum.
One last thing, Fred is absolutely correct with 1695 & 2945 also known as an equity purchase agreement.
If you do one of those babies wrong it could land you with a three times the dollar amount fine or possibly some time in club fed.
Web Reference:  http://www.rescg.com
0 votes
fredeckert, Agent, San Diego, CA
Mon Mar 3, 2008
Katherine,
Peter is corrrect that you don't need a Realtor to buy a property, however, I believe you should get professional help, especially in this market. There are state laws such as 1695 and 2945 of the Civil Code that may apply to your purchase, if you don't intend to live in the property. A Realtor can find out if the price the seller is asking is a good deal in the area you are interested in. They can also help negotiate with the existing lender, if a short sale is needed. In any case, make sure you go thru escrow and get title insurance so you are protected. A homeowner in financial distress, may have other liabilities such as taxes owing and leins attacthed to the property. Please call me if you need more help and I do a free 3.5 hour seminar on foreclsoures, short sales and bank owned properties. Please visit my web site http://www.fredeckertgroup.com (look on the main page for details). See below for the foreclosure process timeline.
0 votes
Peter Dish, Home Buyer, 91030
Sun Mar 2, 2008
Interesting how none of the answers ever addressed your question about the pre-foreclosed process!
I'm not a realtor, but an individual in a similar position - that is, one entertaining the option of buying a pre-foreclosed home. Basically, you don't have to work with a real estate agent on pre-foreclosed deals. Instead, you can personally access the public records where a Notice of Default is filed by the lender. The public records will provide important information such as home owner, address, loan balance, delinquent payments, etc. You may then approach the home owner and try to negotiate with them directly. Depending on how you approach the process, a third party may not be necessary.
0 votes
Ron, , San Diego, CA
Sat Mar 1, 2008
Hi, if your credit is very good, you possibly can get a 100% loan with no money down.
thanks from Ron
0 votes
Isaac Bensus…, , 92037
Wed Feb 20, 2008
Katherine: In order to answer your question a Realtor would have to know a few things. How much
can you afford to spend a month in your mortgage payment, including property taxes, insurance and home owners fees if what you can afford it's a condo or a townhome. Of course, without having to go hungry or making many huge sacrifices. Second: What is your downpayment. Third: What is your credit score. Fourth: What is the price range you were thinking about. If you would like to e-mail me the answers, I will be happy to try to help you out. Isaac Bensussen http://www.besthomesinlajolla.com (619)392-4344 and my e-mail is fancydog@san.rr.com
0 votes
John, , Los Angeles, CA
Sat Feb 9, 2008
Katharine,
Prices are falling like a rock and they have a long, long, long way to go...
Check out this article:
http://www.businessweek.com/magazine/content/08_06/b40700407…

In my opinion, prices must fall to get in line with Home Price vs. Rent and Median Home Price vs. Median income ratios. You will probably kick yourself if you buy a home anytime soon. Renting is your best bet right now, and wait to buy in 2011 or 2012. Especially in San Diego...

If you bought a home for $300,000 and next year, you saw an identical home across the street selling for $240,000, would you kick youself? Considering that rents are also coming down in San Diego (because of all the new construction, which developers can't sell), you are in a prime position to rent a great place and negotiate a great price for that rental. Save your money and buy in a few years.

Good luck,
John
0 votes
Tom Swell, , San Diego, CA
Sat Feb 9, 2008
So, Katherine, you like Mission Valley for the shopping, the food, the nightlife? It really is a fun place.

When money is tight it's important to have a reserve above and beyond what's necessary to close a deal. One way to assure that is getting a nice refund at the close of escrow. Consider a discounter like Redfin whose agents have the resources of a large company base.

best wishes!
0 votes
Cindy Greenw…, , San Diego, CA
Fri Feb 8, 2008
Just because you're seeing "deals" out there doesn't mean they that within reach of many first time buyers. Do you have a preapproval letter from your lender? Do you have a substantial down payment? Lenders are still writing 90% loans but they're not as easy to come by as they once were. If you have excellent credit, 680 and above, a substantial down payment and a good relationship with your bank or lender then you're going to be one of the lucky buyers who will really benefit in this "down" market. Good luck! Cindy Greenwald Prudential CA Realty
0 votes
fredeckert, Agent, San Diego, CA
Fri Feb 8, 2008
Katherine,
I recommend finding a bank owned property that has been listed for a long period of time. I have agents the know what to look for in the Multiple Listing Service to find the best bargains. There are many homes in the county under $300,000, for a single family detached and even lower than that for condos. Let me know if you wnat the names of a specialist in Bank Owned and also if you need a lender (financing is the most important issue right now). Our site below has lots of useful buyer information.
0 votes
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