Buying Foreclosures- Strategies and Considerations!
This page is intended to help educate the buyer of foreclosures on financing options, multiple offer situations, viewing and looking at the investment analysis by way of comparable sales.
Getting our "ducks in a row"!- Financing is always the most critical issue regarding purchasing any property , but with foreclosures, it can be the most critical. VA, FHA, conventional all have minimum property condition requirements. Let me help you with your options so that we can find the best financing - up-front. Then when we view the property we can look for specific property condition issues that I know will affect if the deal will even go through.
Viewing Properties- Bring a flashlight. Understand that the property probably won't have utilities on. If it is cold outside, bring a jacket. Be ready for some surprises, both good and bad. Some folks get very angry when they leave a property and they can trash it. Some and I mean some banks will fix up the property before offering it for sale. Most don't. Typically you buy the property "as is". It is up to us to discover everything we can. We have inspection rights and I will discuss with you how all of this works. They can be a great deal.
Making the Offer- Once we find the "great deal" we will place an offer. Be ready to face a "highest and best offer" situation if the property is really a great one. I know how to write an attractive offer for the bank while still protecting your interests and getting you a great deal. I will run comparable property searches for you and help you determine the very highest offer that would work for you.
What you see is what you get- Once your offer is accepted we will have an inspection and an appraisal. If either one of these reveal problems, you might just have to back out and find another house. Or, if the problems are minor, you take on the responsibilities for fixing it later. If the property is way under current market in regards to value, you can put together an estimate to fix and still go forward as long as there is not a problem with the lender. Once you move into the home and all appliances are up and running, problems can occur. Home warranties can cover some of the items, but it is a house and sometimes problems don't reveal themselves until later. If you saved lots of $$ upfront, then you still might be saving tons even after fix- up.
A Really Cool Option- FHA has a special loan for dealing with property condition issues called the 203 K loan. You can add the cost of repairs to the loan up-front and move into a near new looking home. Some conditions apply so you need to speak with me about how this works. I'll get you with a great lender so that you can get qualified.
I have written this page to point out some of the most common "surprises" that happen to clients every day. Remember that the key to purchasing a foreclosure is to know what the market value is in the current market and if you are willing to take on some risk when you buy one. You can get a great deal but be aware of the process. I am here for any questions you might have so contact me now and I'd be happy to help.
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