atlanta: How do banks price foreclosure properties?
- 07/30/09 02:11 AM
More often than not, when a Buyer decides to make an offer on a bank foreclosure, they feel they should discount the list price by the amount of money the Buyer thinks it will take to restore the property to "live-in" condition. First, each Buyer defines "live-in" condition differently. Granite counter-tops and brushed nickel fixtures are upgrades, not necessities. Secondly, in determining a list price for each property the banks are now taking the condition into consideration. In many cases they are pricing below, and sometimes well-below, needed repairs to bring the property up to "live-in" condition. It is your decision, … (0 comments)
atlanta: Don’t buy a foreclosure without a REALTOR®
- 07/29/09 07:50 AM
Over the past few weeks I have been posting my thoughts, opinions and information on the "system" of purchasing a foreclosed property. I listed 10 Things You Need to Know, but I am going to share #0. Don't buy a foreclosed property without a REALTOR®. Purchasing a foreclosed property is a long and winding road and it should be traveled with an "experienced" driver. Most real estate agents are familiar with the twists and turns, so this is not something you should attempt to navigate without representation. The listing agent for a foreclosed property is obligated to the bank to help … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #10
- 07/22/09 08:23 AM
10. The Foreclosure System is Currently Overworked With the onslaught of foreclosed properties in housing markets around the county, Real Estate Professionals are experiencing problems they've never seen before. The increased volume and never ending Seller demands has stretched listing agents beyond their capabilities. As a consequence, phone calls are not returned on a timely basis, the multiple listing service is not updated regularly and often times the information is wrong. The foreclosure departments at the banks are overloaded as well and their response to offers can be slow. This process can be very frustrating to a Buyer. Patience is a … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #9
- 07/21/09 08:08 AM
9. Penalties There are stiff penalties for every day the closing is delayed, beyond the date specified in the contract, by the Buyer or the Buyer's Lender. A typical penalty is $100 per day, and there can be a minimum fee if you request an extension. It is imperative that you as the Buyer cooperate fully with your lender in providing documentation in order to ensure your loan makes it through underwriting so you can close on time. If a delay in closing is experienced as a result of some action not taken by the Seller/Bank, there is no penalty assessed. … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #8
- 07/20/09 02:54 AM
8. Banks Select the Closing Attorney In most transactions, banks have their own attorneys and will require you use them. Although there have been plenty of successful negotiations to select an attorney you or your real estate agent may have a relationship with, this allows the bank to control the transaction. There is a relatively small group of attorneys that typically handle foreclosed properties for the lenders in Metro Atlanta. They are well-versed in the bank's process and will be best prepared to ensure a smooth and timely closing. Because of the current volume of foreclosed properties, these law firms are … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #7
- 07/17/09 12:48 AM
7. All Properties are Sold "AS IS" The bank has already lost a significant amount of their investment in these properties and are not willing to negotiate repairs. There are usually no allowances for carpet, lighting, paint or other issues with the home. All buyers are advised to have a home and termite inspection to determine the condition of the home. There is also a pre-negotiated "due diligence" period in which that inspection must take place. (See yesterday's Blog on "Time is of the Essence") Banks are seldom willing to extend that period, so you must complete your inspection within that … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #6
- 07/16/09 03:14 AM
6. Time is of the Essence Once, the contract is "binding" meaning both sides have agreed to the terms and signed all documents, time is of the essence. The bank will typically allow 7 days for the buyer to inspect the property. This is called the "due diligence" period. If the buyer wishes to terminate the contract during this period, earnest money will be returned. The bank can also specify a time period in which the Buyer is required to obtain a "commitment letter" from their lender. This means that all inspections must be completed, as well as the appraisal. If … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #5
- 07/15/09 04:57 AM
5. The Bank Sets the Rules Making an offer on a bank owned property requires that you submit "proof of funds" for cash offers, or a "pre qualification" letter from either the bank specified lender or your lender of choice. Additionally, the bank can require that you be pre-qualified by their specific lender. That does not mean you have to borrow money from them, it just means that they want to be sure that you have the means with which to purchase the property. As an example, if Wells Fargo or Bank of America holds the property, then they may want a pre-qualification letter from a Wells Fargo or Bank … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #3
- 07/10/09 03:38 AM
3. Multiple Offer Situations Banks are choosing with increasing frequency to price their foreclosed properties for a quick sale. A good deal is difficult to resist, and you will not be the only Buyer that is interested in taking advantage of a good deal. (FYI - If you like it, are interested in it or think it's a good deal, there is a great chance that someone else does too.) You have to be prepared to write an offer that day, or you may find that the property is no longer available. That means, having a pre-qualification letter and earnest money … (0 comments)
atlanta: The Top 10 Things You Need to Know When Purchasing a Foreclosed Property in Metro Atlanta - #2
- 07/08/09 11:45 PM
2. Check the Property Taxes In many cases, the homeowner who suffered the foreclosure was not aware they were eligible to file with the county for a Homestead Exemption. This exemption is a 60% discount in the property tax rate, and only owner occupants are eligible to file. Secondarily, investors cannot claim the exemption, so former rental or other investment property will have abnormally high property taxes. If one of these scenarios applies to the property you want to purchase, you will need to be able to qualify for the loan with the additional escrows that will be required during the … (0 comments)
More often than not, when a Buyer decides to make an offer on a bank foreclosure, they feel they should discount the list price by the amount of money the Buyer thinks it will take to restore the property to "live-in" condition.
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