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What about buying a foreclosure?

It is a sad fact of the real estate market that there are many pre-foreclosures, foreclosures and short sales out there to choose from. While noone wants to see a homeowner lose their home, these properties offer unique opportunities for buyers.

Questions that you need to ask yourself before pursuing these types of properties:
1. Are you flexible on timing? Can you make a quick decision and accomodate months of possible delay?
2. Is your purchase contingent on selling your home? Banks want a clean offer with few or no contingencies.
3. Have you already secured financing? If you have, the bank considers you a strong and serious buyer that has done the initial footwork required to purchase a home.
4. Do you have resources to rehab and repair a property, if needed?
5. If you are buying a property for investment purposes, what is your action plan? Rent or re-sell or inhabit the property yourself?

Foreclosure is a process that can offer buying opportunities at each stage.
Stage 1- Pre-foreclosure sale is a period of time that begins with the initial mortgage default and ends when the property is sold.
Stage2- Foreclosure sale is when the property is auctioned off to the highest bidder that also meets the terms of the sale.
Stage 3- REO (Real Estate Owned) is real estate that did not sell through foreclosure and is transferred to the lender.

What is a short sale?
This is a situation in which the seller owes more on their loan than a sale on their property will produce, and they are unwilling or unable to make up the difference at closing. The seller may or may not be in foreclosure. Banks may consider a short sale to a new buyer. Foreclosures are very expensive for banks that need to hire attorneys, property managers and other professionals. Accepting a short sale enables the bank to cut their losses.

Your ABR buyers representative can help you in this process, especially if your Realtor also has the training and experience in these types of sales indicated by an SFR designation..

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