Foreclosure List

Is a Foreclosure the right way to go for you?

Foreclosures are homes that have been repossessed by their lender and are now being offered usually at a significant discount to sell it quickly. They are wonderful opportunities for Buyers and Investors to purchase homes possibly for the first time in their lives.

Normally, Foreclosures (also called REO's or bank owned properties) are sold in an "AS-IS" condition due to their discounted price. You are still allowed to perform your inspections and can cancel your contract if their is damage found that is beyond your comfort level to accept as long as your purchase contract states you can. In some cases, you may be able to renegotiate some credit if the damage is severe enough that it would impact the sale.

The response time on an offer with a Foreclosure can vary but usually you will have a reply within a week depending on the amount of offers received and the location of the bank reviewing the offers.

There are stipulations on submitting an offer on a foreclosure. Customarily, the offer cannot be contingent on the sale of another property. This means you cannot rely on the sale of another property in order to purchase this one. In addition, the Title/Escrow company is usually picked out by the Buyer but in a Foreclosure, the Seller (Bank) gets to choose. As with any offer, a pre-approval letter from you Lender will need to accompany your offer. A deposit is usually expected at the time of the offer. This amount can vary but a few thousand is usually enough. An increase of deposit may be required in the 3rd. week once all the contingencies have been removed. Most Foreclosures close within 30 days of the offer being accepted.

The Short Sale Myth

Short Sales are homes that are in preforclosure and the Seller (owner) has stopped making payments on the property. The term "Short Sale" means that the bank may be willing to accept a lower amount than what is currently owned on the property, hence the shortage.

What most Buyers are not informed about when they see these homes online is that the majority of these Short Sales are not approved by the mortgage holder. The Seller and their Realtor have put together a listing price that they think will be accepted but in most cases, they are way off. If you are a Seller, you need a Realtor that is experienced in negotiating with your lender to get your price accepted. If you are a Buyer, you need to make sure your Realtor is up on the amount owed on the property you are wanting to put an offer in on to make sure the amount the Seller is asking is reasonable to what the lender holding the note for.

Short Sale homes usually have 2 notes on the property, a first and a second mortgage. Both mortgages have to agree to accept less than what they are owned for the contract to proceed. If the first and second mortgage are with different banks, this is virtually an impossible task and in most cases, futile.

Offers on Short Sale properties can take weeks to months to get a response from and in most cases, there is a severe counter-offer to your original offer at that time. It is not uncommon for counter offers to be $20,000 or higher than your offer even if you offered the listing's full price.

As with Foreclosures, Short Sales have stipulations on submitting offers as well. Customarily, the offer may not be contingent on the sale of another property. As with any offer, a pre-approval letter from you Lender will need to accompany your offer. A deposit is usually expected at the time of the offer. This amount can vary but a few thousand is usually enough. An increase of deposit may be required in the 3rd. week once all the contingencies have been removed.
Because Short Sales are unpredictable, they tend to take longer to close. One of the most important factors to keep in mind as a Buyer is how long is your loan lock good for. If your interest rate is only guaranteed for 60 days, are we going to close on this home before your rate goes up?

So now what?

First things first, CALL ME!

When you are looking for a home, you have many choices. Sales from Sellers directly, Foreclosures (REOs), and Short Sales are among the most common these days. Foreclosures are the hot ticket right now and justifiably so! They are wonderful opportunities for folks to own an affordable home, and in most cases, for the first time in the lives. For experienced Buyers, this is the best time to pick up an investment home. Whatever the reason, this is the perfect time to go shopping!

Short Sales are quite a bit more frustrating but can produce profitable results if you have the patience and a lot of time on your hands. Banks are getting better at handling these but they are so overwhelmed, it really is a last resort.

There are so many wonderful homes out there waiting for offers, it staggers the mind. I would be honored to help you find that perfect place to call home. Simply click on "Contact Ken" or "Dream Home Finder" and I will be happy to get started with your free list. Just let me know some basic information of what you are looking for, location, amenities, and price range and I will have a list to you within 24 hours!

Thank you again for honoring me with a visit to my website.

Ken

Contact Ken Dream Home Finder