HOW TO BUY A FORECLOSED HOME

As a prospective homebuyer, you have many options in your search to find an affordable home. One of those options today is the purchase of a home that has been foreclosed and is currently owned by Fannie Mae.

We provide the following questions and answers to help you in your search.

With strength in the real estate market, the days of hoping to spend 30 cents on the dollar when buying a foreclosed home are not realistic anymore. Instead, you find many foreclosed homes going for their market value, but you can still find foreclosed homes receiving discounts of 10 – 30%. Therefore, to be successful, you need to make sure your expectations are in order otherwise you could be very disappointed.

You will find a wide selection of homes, including single-family homes, condominiums, and town houses - located in a variety of neighborhoods throughout the community. The number, types, and sale prices of housing may vary substantially. Many of these homes tend to come with needed repairs, because the owner didn’t have money to pay the mortgage let alone repairs.

When it’s time to buy, make sure the condition of the property is accurately represented. If the property needs repair, be sure to identify the cost – in some cases the condition of the home and needed cost for repairs can prevent you from getting a loan on the property. This is why it is best to be "pre-qualified" for a mortgage, which a local lender can assist you with.

You can find local foreclosures by looking in the local Multiple Listing System (MLS) accessible by any real estate broker. You can search the Fannie Mae website for a list of foreclosures at fanniemae.com. Your best approach is using a local agent to identify all the foreclosed homes in your area.

Fannie Mae is a private, shareholder-owned company that works to make sure mortgage money is available for people in communities all across America. By investing in the mortgages lenders create, Fannie Mae provides a constant source of mortgage funds.

If you find a foreclosed home, the process below will be followed. This example is with Fannie Mae. First, you present your offer to the listing broker who will present it to Fannie Mae for consideration. Fannie Mae will do one of three things in response to your offer. Through the listing broker, Fannie Mae may accept your offer, reject your offer, or make a "counter offer." This counter offer begins the process of negotiating for a selling price agreed to by both you and Fannie Mae.

When the sales price is agreed upon, you will sign a "purchase and sales agreement" and begin the process of obtaining mortgage financing to purchase the home.