7 Tips on Buying a Foreclosure

Reblogger Charles Stallions
Real Estate Broker/Owner with Charles Stallions Real Estate Services

Pensacola, Florida: My best of the best series of articles on different real estate topics beneficial to Pensacola Investors, Landlords, Tenants, buyers, sellers in Pensacola, Pace and Gulf Breeze, Florida. This weeks subject is on REO owned, Foreclosures and Short Sales. I hope you find this series to be educational as well as informative. Call me to discuss your options whether buying or interested in selling on the short side I can help. Charles Stallions 800-309-3414 or E-mail charles@charlesstallions.com or to view short sales and foreclosures in  Pensacola, Pace or Gulf Breeze, Florida Click Here.

Original content by Roger Johnson

With the market what it is today , foreclosures and REO properties are the talk of the town.  I talk with several buyers through the week that are interested in buying a foreclosure in the Hickory, NC area because they've heard it's the best way to "get a deal."  That may be true, but before you think about looking at foreclosures, here's some tips to help you decide if a foreclosure is really the way you need to go.foreclosure sign

First, let's define what we mean by 'foreclosure' and REO propertie
s.  The term 'foreclosure' is used in a lot of different situations, but here we're referring to when the bank as actually taken possession of the property, become the owner, and has listed it for sale.  "REO" stands for Real Estate Owned Property; a term that banks use once they have foreclosed and become the owners.

Okay, on we go!

  1. Get qualified for a loan before you begin your search.  This is PRIMARY.  And I mean fully qualified.  REO's generally want a fast sale and they expect to have a good prequal letter or proof of funds (if you're paying cash).  At least in the Hickory, NC area (and I'd presume elsewhere as well), you don't have a financing contingency on foreclosure properties.  Get Pre-Qualifed Now
  2. Understand that REO's will usually need work.  Sometimes lot's of work!  I say this because I've shown buyers that said that they don't mind some TLC, but then balk at the smallest problems.  If you're not handy, or don't have a plan to fix up the home, buying a foreclosure may not be the best bet for you.
  3. Foreclosures are rarely in 'show' condition.  Similar to above, even if the home needs very little actual repairs, it may be completely trashed.  You have to be able to look past the mess and see the possibilities of the home.
  4. Foreclosures are truly sold "As Is."  Most homes are sold as-is in NC, but in a standard contract, you have a 'condition contingency.'  Like the loan contingency, in the Hickory, NC area at least, many REO's have removed ALL contingencies from the offer.  In a nutshell, that means that finding damage during an inspection you may have missed will not be a contract contingency to help you get out of the contract and retrieve your earnest money.
  5. Be prepared for a Bid War. Especially if the home is already priced right for the condition.  There will be a lot of people interested in the property, especially investors, and they will bid higher if it meets their numbers.
  6. Don't wait to make an offer.  Many people that are interested in a foreclosed home as their primary residence will often wait on making an offer on it.  Sometimes, it's because of the condition, but in a lot of cases, it's because they want to wait to see "how low it'll go."  If it hits the market over-priced, that may work, to a point, but usually what happens, is that they miss the opportunity to make a bid at all because someone else didn't wait.  See #5.
  7. Don't get discouraged. You may miss out on a few foreclosures, even if you do get your offer in.  That's just part of dealing with foreclosures.  Still, if you think a particular house was the "IT" house for you, you may still have a shot.  This is still a tough market, especially concerning financing.  Many times with foreclosures, something happens in the deal that prevents it from closing and it goes back on the market.  So keep checking until it says "SOLD."

If you're interested in buying foreclosures in the Hickory NC area, sign up for my Foreclosure Hunter Program today or give me a call.

photo courtesy of Andrew Bains flickr photostream

__________________________________________

Hickory Home SearchForeclosure Hunter

Roger Johnson is a Realtor with CENTURY 21 American Homes in Hickory, NC.

I service the Catawba and surrounding counties, and the Hickory, Newton, Conover, Taylorsville, Claremont, Statesville and Charlotte, NC real estate markets.

You can contact me via Email or give me a call at 828-381-9245 or 828-568-2121 ext 310

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Ambassador
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Charita Cadenhead
Keller Williams Realty - Birmingham, AL
Serving Jefferson and Shelby Counties (Alabama)

Very good points.  I'm glad you included the word "most" in #4 (instead of "all").

Feb 08, 2010 08:29 AM #1
Rainmaker
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Roger Johnson
CENTURY 21 American Homes - Hickory, NC
Realtor - Hickory NC Real Estate

Hey Charles,

Just wanted to say thanks for the reblog!

Feb 09, 2010 05:27 PM #2
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Michelle Cooks
Charles Stallions Real Estate Services - Pace, FL
Pensacola, Pace & Gulf Breeze Property Management

Buyers are taking advantage of our Smooth Move Program at closing, Choose between 1% Cash Back,  1 years taxes paid, 1 years insurance paid, Free Home Warranty and Use of our Moving Van or Free Survey with Free Termite. Lots of choices but the Realtor should be Contact Charles Stallions 850-478-8811 and make your move smooth.

Renters are taking advantage of our Smooth Move Program, Choose between Free use of our Moving Van or a $25. or Gift Certificate. Be sure to ask about FREE Rent.

EXPERIENCE the DIFFERENCE…

Call 800-309-3414 for Joyce Kelley CBR, CBA, Buyers Agent for Charles Stallions. I only work with buyers and tenants so you get my undivided attention, expert advice on what a home is worth not what a seller or Landlord thinks it is worth. Whether you would like to see one home or ten count me in because it is all I do. I have an appraiser, title company, pest control man, general contractor and most important 3 specialized lenders on speed dial and at your beckon call.

Military Relocation to Pensacola NAS and PCS, For Rent 32514, Navy Times Rentals  

Oct 26, 2012 09:11 PM #3
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