Purchasing Tips
It's critical to have the home professionally inspected before you make an offer or put down earnest money. The inspector will assess the structure's soundness and may uncover problems that would be very costly to repair. Banks usually sell foreclosed homes as-is, meaning they won't make any allowances for repair. And even in a short sale, they likely won't make any such allowances, because they're already losing money on the transaction. 
You should have your financing in order before pursuing a foreclosure purchase. Pre-approved buyers have the best chance of getting the property in case of multiple offers. Also, banks generally aren't interested in contingencies (for instance, needing to sell your current home before purchasing another).
You might also consider hiring an appraiser who'll tell you what the house is worth. A qualified real estate agent can also perform a Comparative Market Analysis.
To guide you through the process - from obtaining a loan to identifying a home, to negotiating with the sellers (whether homeowners or banks), to closing - contact me today.
Mortgage and foreclosure terms defined
Distressed Properties and FHA Loans
If you're a first-time homebuyer, a federally insured FHA (Federal Housing Administration) loan might be a good option. The FHA has a program to help you repair a fixer-upper. You can get one loan that combines the mortgage with the repair costs. The amount of the loan is based on the projected value of the property once repairs are made.
FHA loans only require a 3.5 percent down payment - compared to 20 percent with conventional loans - and the down payment can come from an employer, family member or charitable organization. FHA loans also have lower closing costs than conventional mortgages.
Since the federal government insures these loans, you'll get a competitive interest rate and lenders may be willing to give you terms that make it easier to qualify for a loan. If you have less-than-perfect credit, it's easier to obtain an FHA loan than a conventional mortgage.
Find out more about FHA loans.
About HUD Homes
FHA-insured homes that go into foreclosure are acquired by the U.S. Department of Housing and Urban Development (HUD). HUD homes are offered for sale through Internet sites managed by management companies under contract to HUD.
Real estate agents who register with HUD can submit offers on behalf of their clients. HUD pays the agent's commission.
HUD homes are sold as-is, without any warranty. HUD doesn't make repairs nor pay to correct any problems. Again, that makes it critical to have homes inspected before making an offer.
In designated revitalization areas, law enforcement officers, K-12 teachers, firefighters and emergency medical technicians can purchase a home at 50 percent off the listing price. (They must commit to live in the property for three years.) Additionally, evacuees from hurricanes Katrina, Rita or Wilma can purchase a HUD home at a discount.
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