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"Foreclosures 101," Central Oregon Coast, how to lead the pack!
Foreclosure homes are often a "cash only" sale, however, I have seen them sell with a construction loan to cover cost of purchase, + expected repairs. Repairs must be carefully itemized, lender will require a completed list.
If an REO property is priced to sell it may receive multiple cash offers, which can close much more quickly than a construction loan. Many foreclosures need repairs, poor condition of house not ideal for buyers who require a bank loan. House needs to be in better condition to get through appraisal and underwriting process.
Cash buyers usually win the foreclosure bids, the competition can be fierce!
However, a Buyer with a construction loan pre-approval letter CAN still win the bid, IF offer price is highest! REO Asset Manager may award winning bid to a strong buyer with pre-approved loan, even though listing states "cash only."
Some buyers will pull cash from a Home Equity Line of Credit on primary residence, or from a stock or investment accounts.
If you plan to buy a foreclosure using cash funds:
Have your financial institution prepare a Proof of Funds letter for the specific dollar $ amount of your offer. Or, send a screen shot of the bank account.
Proof of Funds is a letter ... more
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