what-are-the-steps-for-purchasing-a-foreclosure - Rock-n-Roll Real ...

Q: How does this work and what is the difference compared to an estate or other properties?
?Anonymous, Colwyn, PA

A: Great question. When someone falls behind on their mortgage payments the bank sells their home through the process of foreclosure. Depending on the state and the public policy this can be a quite lengthy process (e.g. greater than 1 year). Once the property is ?foreclosed? on the bank becomes owner and goes to the bank?s real estate owned department (REO department). They then find a local real estate agent or broker to help them sell it as banks are in the business of lending money not selling houses. In my book, REO BOOM, I go into the granular details of the entire foreclosure process from both the eyes of the real estate agent and the home buyer. In contrast, is a short-sale when the borrower who is behind finds a buyer, informs the bank about the offer which is usually less than what they owe (?short?) and the bank evaluates whether to let the sale happen or go through the cumbersome and lengthy foreclosure process. Within the next 24 months a lot of wealth will be made buying foreclosures. Be ready!
Aram Shah is a Realtor? with Florida Capital Realty in Doral, FL.

A: Hi there -

In my area, there is no significant difference in purchasing a foreclosure property. Banks obtain an appraisal and a broker?s price opinion to determine value, that is how list price is established, it is has nothing to do with the default amount.

You will have to sign some disclosures, in some cases quite a few disclosures, notifying you that the bank knows nothing about the property, you are purchasing as is, you cannot sue them for anything ? that sort of thing.

Foreclosures are quite possibly easier than estates and owner occupied as the bank has no emotional investment. You cannot hurt their feelings with a low offer. That is a risk on properties with owners that have a vested interest, plus sweat, memories, and attachment.
Darlene Humphreys is a Realtor? with Coldwell Banker Holman Premier Realty in Klamath Falls, OR.

A: You can buy a short sale which is a pre-foreclosure property or an REO or real estate owned which is after the bank has foreclosed on the property. You can sometimes get a good discount but the sale is AS IS. Make sure you have a good Realtor and a good home inspection and add up the repairs to see if you really are getting a good deal on the home.

The upside with equity sales is that you can negotiate repairs and the homes tend to be in better shape, whereas the foreclosure or pre foreclosure properties tend to have differed maintenance.
Paola Martinsen is a Realtor? with Equity Real Estate ? Premiere Elite Branch in Murray, UT.

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