Short Sales and Foreclosures in Johns Creek Georgia Part Two
When thinking of buying a home, many people wonder if buying short sales and foreclosures are the way to go. In Short Sales anf Foreclosures in Johns Creek Georgia Part One, I explained the difference between short sales and foreclosures, and I answered commonly asked questions about short sales. The following are some previously asked questions on foreclosures.
How much of a discount can I get on a foreclosure?
It's hard to tell. It depends on how motivated the bank is; how much inventory they are holding, how long they have been holding the property, what the previous owner owed on it vs. its value, etc.
Are all foreclosure sales great deals?
Some sell at fair market value, some sell at a modest discount and some sell well below fair market value.
What type of forms must I sign when I purchase a foreclosure?
In addition to the usual and customary purchase and sale documents, most banks owning property add their own addendums to the purchase and sale agreement. Much of the language in the addendums revolves around the fact that you accept the property in it's "as is" condition at closing; and the bank has no liability for any problems that may arise or become apparent after the sale closes.
Can I alter the bank's addendums or decline to sign them?
Not if you want to purchase the house. With foreclosure properties it is generally "my way or the highway" as far as the bank owners are concerned. If you're not willing to sign their required documentation, and follow their precise requirements in all aspects of the contract, negotiation and closing process, they will not work with you.
May I inspect foreclosure property and have a financing contingency before committing to buy it?
Yes, the process is the same as with normal sellers, you may do an inspection once you have a binding purchase and sale agreement; however the banks give you a very short time for inspecting and getting your financing, usually 7 days. It is wise to be pre-approved for your loan as that normally takes longer than 7 days and you may lose a good opportunity while waiting for loan approval. In normal sale contracts, the seller is responsible for turning on all the utilities so that you can inspect. With some bank owned homes, you may be required to turn them on in your own name and pay all associated deposits and charges.
Will I receive a seller's disclosure with a foreclosure property?
No. The bank owners don't know anything about the condition of the property or its history since they have never lived there. You and your inspector(s) are on your own to learn what you can about the condition of the property.
How long does it take to negotiate and close on a foreclosed home?
It usually takes slightly longer than a privately owned home sale. The delay comes during the negotiations. Some bank owners will respond quickly to inquiries/offers and some may take 7-14 days to respond. Many bank owners work with asset managers who negotiate for them. The asset manager may negotiate and come to agreement with you, but no contracts are binding until the bank owner approves the agreement. Most bank sellers want to get you to closing within 30-45 days after you reach agreement.
Must I finance the property through the bank who owns it?
No, but they may want to pre-qualify your or require you to get pre-qualified with a lender of their choice before they will even look at your offer.
If you're ready to start looking for short sale and foreclosure property, or if you still have questions, contact me at 404-226-8484, and I can help you today! Short Sales and Foreclosures in Johns Creek Georgia Part Three and Part Four will be published soon with short sale and foreclosure information for home sellers too.
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