8 smart moves for buying a foreclosure | Interest com | Mercedes-Benz catalog with specifications, pictures, ratings, reviews and discusssions

8 smart moves for buying a foreclosure | Interest com

16 Янв 2015 | Author: | No comments yet »
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8 smart moves for buying a

By: Amy Fontinelle, April 07th

The flood of foreclosures we’ve in recent years has turned a swift stream. So, if you’re in the to buy, the deals you’re to find aren’t quite as as they once were.

But if you can the right foreclosed home, you can get a bigger, better house you otherwise could afford.

5 million homes have through foreclosure in the half since the housing collapse, but the of foreclosure is falling in many

The Mortgage Bankers Association the percentage of homes in foreclosure at the end of — just 2.86% — was the lowest the beginning of 2008.

And the National of Realtors found in late that 14% of sales of existing were foreclosures or short That’s down from 24% a prior.

Although there are foreclosed houses available, also some evidence investors are beginning to slow purchasing frenzy, which you may not face as much competition. But still have to worry buyers who can pay in cash.

Whether buying a foreclosure to turn your primary residence or to out, you don’t just a cheap property — you want a value.

These 8 smart can help you buy the right foreclosure for

Smart move 1. Never buy a sight unseen.

When you buy a repossessed home at you usually can’t enter the to assess its condition before you

At best, you might be able to the exterior, peek in the windows and up a neighbor about the property’s history.

Without going and without an inspection, you won’t what shape the home is in you get the keys. At that point, any costs are yours, and they can run the tens of thousands of dollars.

former owners facing have destroyed plumbing and systems, ripped out carpeting, holes in walls and stripped of kitchen appliances, chandeliers and heaters.

It can be truly awful.

that couldn’t keep up payments on their mortgage likely didn’t keep up normal maintenance on the home says Rick Snow, of First Choice Realty in El Texas. There may be many maintenance issues that need to be addressed.

So here’s the inviolate rule of buying a Never commit to a home you thoroughly inspected, inside and

Smart move 2. Buy repossessed through a real estate

When the home goes to and no one bids, or no one bids enough to the outstanding mortgage, the bank holds the loan gets to the home.

These become are known as real-estate owned properties.

The bank will repair the worst damage and a real estate agent who in foreclosures to market the home.

That selling agent allow you to see what’s inside so you know exactly what buying.

Smart move 3. what it will cost to the home livable.

Good homes are merely houses have sat empty and neglected for with dead lawns, paint and other relatively problems.

Others are so trashed you can’t live in them making repairs.

For $300 to a home inspector can help you all of the problems.

A home inspection is with any home purchase, but with foreclosures.

Banks and do not offer disclosure for foreclosed says Brad Pauly, of Pauly Presley Realty in Texas.

Owner-occupants, on the other have to tell you anything aware of that’s wrong the property.

The American Society of Inspectors or the National Association of Inspectors can help you find a inspector in your area.

For an of repair costs, you’ll a licensed contractor.

Build a — at least 10% — into your budget. Remodeling always to cost more than you it will.

How to choose a home

Having a complete understanding of a faults is essential to making a purchase and protecting your particularly when you’re with a foreclosed property.

our 3 options for finding a competent, and unbiased home inspector.

move 4. Know what homes are selling for.

You can find “comps” for the property considering on Zillow.com and Redfin.com.

get actual sales prices for nearby properties that sold recently, not asking or the unreliable estimated values Zillow creates based on estate records.

You won’t be able to tell the condition of the that recently changed — though sometimes listing are still available and can give you an — but you’ll be able to establish a of prices, a typical price per foot and an average price.

any comps with extremely low These may be transactions between members that don’t market value.

Make your offer includes a to clause that lets you out of the in case the appraisal your orders once you’re contract comes in low.

foreclosures may be priced over value, says Melissa an independent broker at Broadpoint in San Diego County. Cash or buyers obtaining a HomePath (a purchase and renovation mortgage Fannie Mae), which no appraisal, should obtain an appraisal to make sure they are not overpaying for a property.

move 5. Bid competitively.

The main buyers think they shop for a foreclosure — to get a bargain — always valid.

In the past, advised foreclosure buyers to what they think is a price for a similar but well-maintained subtract the cost of repairs, and 80% of that amount.

Back then, the market had a of foreclosed properties, but that’s not the anymore. Discounts aren’t as

The National Association of Realtors in January foreclosed property at a 16% average discount to market. homes in “above average” sold at a 12% discount.

In hot markets, if the is in a desirable location, you will multiple bidders and the home sell at or near market Pauly says.

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But you can still advantage of two things working in favor:

The bank is not emotionally to the home and has no irrational expectations price.

The bank is losing every day the house sits

Remember, the home’s real is the money you pay the seller, plus you’ll spend on repairs and

Set a firm maximum price within your budget and the property’s actual value. Be to walk away if the bank accept it.

How much house can you

You don’t want to drain savings and take on mortgage that are a struggle to make month.

Our 5 smart moves help you make savvy about how much of your you should spend and how big a down you should make — before you shopping.

Smart move 6. up your financing and earnest in advance.

With any home it’s important to know you can afford before you start

And if you’ll be using a mortgage to pay for the having financing lined up is one of the ways to prove to the seller you’re a serious buyer and your chances of having offer accepted.

When buying a foreclosure, taking step is not optional.

Be preapproved going to look at any foreclosure and earnest money ready, Debbie DiFonzo, broker/owner of Country VIP Realty in Lebanon, Mo. a document from your in hand or a letter of cash your bank. Almost all REO require this information making an offer.

Taking step will put you ahead of the if other bidders are less And if you’re up against cash and you’re using financing, able to prove you can close is only shot at a winning

Smart move 7. Understand the restrictions on foreclosures.

Most won’t lend you money to buy a that’s in terrible condition.

If you are a loan to purchase, then of those repair items may be lender required repairs, says.

In a typical sale, the might make any repairs bank requires. But foreclosures are

The bank selling the home may not be to do the repairs, and the bank lending you the may not be willing to close the loan them, especially on an FHA loan.

Even if the bank that the foreclosure would let you make before closing so your would approve your you’d have to pay cash out of for those repairs — a bad idea, the deal could still apart and you’d be out that Snow says.

Smart 8. Arrange buying and refurbishing together — in advance.

One of the only to get around the catch-22 of lender-required is to use a 203(k) loan from the U.S of Housing and Urban Development.

If you occupy the property as your residence, you can use this program to the purchase and repairs with one loan. The money comes a traditional lender, but HUD guarantees it be repaid, making it easier and to obtain.

203(k) loans with lots of red tape, and not all offer them. The easiest way to one who does is with HUD’s tool .

Fannie Mae has a similar called HomePath that requires 5% down and waives the requirement for mortgage insurance.

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