ISSUE 2 YEAR 2011
THE ART OF PURCHASING FORECLOSURES
TOP 3 MISTAKES OF FORECOSURE HOME BUYING
THE ART OF PURCHASING FORECLOSURES
1. Don't get caught up in a feeding frenzy MAY 2011 OAKLAND COUNTY FORECLOSURE MAP
"Everybody and their grandmas are trying to buy foreclosures," said Glenn Kelman, CEO of Redfin, an
online, discount broker. But that doesn't mean you should lose your head.
Banks put repossessed homes back on the market at cut-rate prices because quick sales help avoid the
expense of upkeep, such as property taxes, insurance, heat and electricity.
Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may
bid until homes are no longer bargains. Don't get caught up in a bidding war. Instead, carefully
calculate what you want to spend and do not exceed that price.
2. Get pre-approved from the lender you want to buy from
If you're trying to buy a property from say Bank of America, it can help to get a pre-approved
mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it's
similar to others. Plus, you're not locked in if other lenders offer you better terms. You can always
change your mind and get your mortgage from another source.
3. Consider fix-ups
Most REOs, the industry term for bank owned properties, are sold as is. "The conventional wisdom is
that banks will do nothing to the houses before the sale," said Kelman. That can be problematic today
because so many foreclosed homes are in less-than-mint conditions. Often, the former owners were
struggling to pay their bills and may have neglected routine maintenance. Or, they may have trashed
the properties before leaving. In 25% of cases, homebuyers persuade lenders to fix some of the
problems before the sale closes. Most of the time, banks would rather sell the house to the next
available bidder -- one who doesn't ask the bank to pay for repairs. So be willing to consider a home
that needs some work -- but budget accordingly.
More info: http://money.cnn.com/2009/11/19/real_estate/buying_foreclosures_tips/index.htm
Information courtesy of www.realtytrac.com
The Top 3 Mistakes of Foreclosed-Home Buying
1. Get an Agent. While some enterprising do-it-yourselfers may get away with going
through the traditional home buying process without an agent, foreclosed real estate is
another matter. Such complex transactions require the expertise of not just any real
estate agent but one with a background in buying and selling foreclosed homes. So unless Oh, Canada!
you are truly a real estate expert, do some research and find an agent with foreclosure
experience in your market.
International buyers are hot for US real estate these days;
2. Taking no prisoners. While buyers can certainly get good deals on foreclosed homes, it's and one group is simply sizzling: Canadian buyers.
a mistake to assume that banks will accept any and all offers. (Unless, of course, the In fact, the 2010 National Association of Realtors (NAR)
listing specifically says so.) Banks typically outsource their foreclosed properties to real Profile of International Home Buying Activity Report found
estate agents. In such cases, agents can receive listings in bulk, perhaps 50 at a time. that foreign real estate buyers comprised 4% of the US real
While these agents want to get the properties sold off quickly, they also want to get a estate market. Amazingly, Canadians accounted for 23% of
good price for the seller so that the bank will give them additional business in the future. the purchasers.
A lot of people assume that because a property is bank-owned they will get it at half
price. This is not true. As such, insultingly low offers have the potential to tank the A stabilizing global economy, coupled with lower U.S. real
negotiations over foreclosed homes. So make sure you present your wholesale offer case estate prices and a strong Canadian dollar are just some of
well both in writing and verbally with the listing agent. the obvious reasons that it could be a good time to buy.
But, Canadians do need to tread carefully: U.S. property
3. Being unfamiliar with the law. It's important to remember that real estate agents aren't prices are still on a slow downtrend and we just can’t know
lawyers, and foreclosure laws can change significantly from state to state. Consumers how close they are to a bottom. As a prospective
should review the foreclosure laws in their state and then get qualified legal advice from homeowner, you also need to factor in the cost of
a local real estate attorney. maintenance as well as annual property taxes.
For more info: http://money.usnews.com/money/personal-finance/real-estate/articles/ For more info on relocating, purchasing or selling a home
in the U.S, contact Janet Graham: 248-672-4966.
Janet Graham. Phone: (248) 672-4966. Email: email@example.com. Website: www.janetgrahamrealtor.com.