Foreclosure Properties
For the past several years the foreclosure market has been very popular with Buyers and everybody seems to want to buy a foreclosure. While these homes may not be for everyone, you can sometimes get a very good deal. I am very experienced with helping buyers purchase a foreclosed home. There are many facts and myths about the foreclosure market. Here are some facts for you:
- Having your financing in place before you start looking is a must. Everybody knows that the buyer has to qualify for the mortgage but most people don't understand that the house has to qualify as well. A home in need of repair will not qualify for some mortgages and it is extremely important to know which houses will qualify for the mortgage that you intend to use.
- Most foreclosures will need work. The owner couldn't afford to make the payments so they probably couldn't afford to make repairs either. And owners that are being evicted from their home may very well have taken out on the home itself before they left.
- The bank may not do any repairs that are needed. the sale of the home will be "as is". You woll probably still have an opportunity to conduct a home inspection but the bank will probably not repair anything that you find. Although you can probably get a release from the contract if something major is needed, odds are they won't fix it. And they won't compensate you for any expenses that you have incurred up to this point either.
- Most people think that you can "steal" a foreclosure from the bank. The truth is usually the exact opposite. The banks buy and sell houses all of the time and are quite experienced at it. They will normally price the home at about 90% of the actual market value and don't like to budge off of that price. In todays market this will usually generate a lot of interest and the home will sell quickly. You will see multiple offers (from different buyers) if the house is in decent shape. If you think that you can offer half of the asking price for a foreclosure and get it you are in for a surprise.
- It's not all bad news when talking about foreclosures. Many banks and federal institutions offer deals and special programs for owner occupants that purcahse their foreclosed homes. Fannie Mae very often will do a cosmetic makeover on their properties and sometimes they are actually "move in ready".
Short Sales
Short sales are drastically different from foreclosures and can bring their own set of unique advantages and disadvantages.
