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Foreclosure Real Estate and Home Ownership

By
Services for Real Estate Pros with USHUD.com

There is a system to purchasing foreclosure real estate that can be broken down into six basic steps. Following these steps will simplify a foreclosure real estate transaction while avoiding common mistakes made by the typical consumer.

Step 1 The pre-approval process.

The most common mistake made by the typical homebuyer is shopping for a home without having financing pre-arranged. A qualified mortgage lender will help the homebuyer figure out the amount that the homebuyer is qualified to borrow and determine any options available to the homebuyer to increase borrowing power. Homebuyers need to explore alternative lending programs, such as those backed by the Federal Housing Administration (FHA), the Veterans Administration (VA), The Federal National Mortgage Association (Fannie Mae) and private sources of funds. The pre-approval process is much more involved than a simple pre-qualification process. Pre-approval converts a homebuyer from "contingent" to "all cash," improving one's negotiation position.

Step 2 The interviewing process in selecting a real estate agent.

Homebuyers need to select the real estate agent that will best serve his or her needs with regard to finding and purchasing a foreclosure home.

Step 3 The actual hunt for a foreclosure home.

A common mistake made by many homebuyers is that they select a foreclosure home too rapidly. In a hot market, however, a quick decision may be necessary. Buyers should view at least five or ten homes within their price range. The importance of step one, prequalification, is that homebuyers are only looking at homes they can afford, thus expediting the shopping process.

Step 4 The negotiating process.

Once a homebuyer finds the right home, it is time for negotiations. If you have followed this outline in its proper sequence you are ahead of the game. In an active real estate market, being pre-approved prior to finding your home will improve your chances of getting the home desired should there be competition for the home with multiple offers. Home sellers are more likely to accept an offer from a prospective homebuyer if they have the assurance that they homebuyer can complete the transaction for the home rapidly.

Step 5 Loan Processing and Approval.

Once the home is selected and the terms have been negotiated, your mortgage lender will take the homebuyer from the loan application to the final approval of the home loan. There are many steps along the way that will need constant supervision and involvement from all parties.

Step 6 The Closing Process.

A homebuyer that does not come to the closing fully prepared may run into unpleasant surprises that could not only delay closing on the foreclosure home, but could very well dissolve it altogether. The homebuyer's team, their real estate agent, mortgage lender and closing representative, will coach the homebuyer on what happens at the closing, who needs to be present, and what documents to bring.

The loan professional that has made this information available to you specializes in assisting those individuals with obtaining a home loan whether for purchase or refinance. Your loan professional in most cases can advise you on the best approach and help you with the specific loan requirements necessary for purchasing the foreclosure home you desire.

 

For more information about Real Estate or Foreclosures please visit USHUD.COM

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