Keeping Buyer Frustration Down

By
Real Estate Agent with EXIT Strategy Realty

foreclosure for sale sign

 

In some markets, the majority of homes actually selling are foreclosures.  The following tips will keep the frustration level down when purchasing your foreclosure but they are also relevant for a traditional home purchase. 

1.       Work with a buyer’s agent. The listing agent for foreclosures typically has a very high inventory of homes he/she is managing. Sometimes these are smooth transactions. However, often there are glitches and you want a buyer agent who will be more invested in your purchase succeeding.

 

2.       If financing your home, make sure you are familiar with the mortgage process. FHA has strict standards in regarding to property condition –peeling paint, structural damage, etc. Your realtor should be able to educate you regarding conditions in the home that might eliminate it in regards to FHA appraisal approval.

 

                                           

 

3.       Don’t cheap out on home inspections. Often, when buyers are straining their resources to purchase the home they are inclined to skip on the home inspection. Village inspections are not equal to a licensed home inspector.  Saving a few hundred now can cost you thousands in the future.

 

4.       Don’t cheap out on hiring your own attorney. Agents can’t give you legal advice.  The seller’s attorney won’t look out for your interests. Protect your interests and your pocket book by hiring your own attorney.

 

 

 

5.       Foreclosures are not likely to be opportunities for lowball offers.  Foreclosures often have multiple offers.  The bank may not be willing to negotiate if the offer is ridiculously low---they do have the option to just reject the offer.  This is especially true if home is already priced significantly below the market value.

 

6.       Be prepared for possible problems after the offer is accepted.  Closing extensions, title issues, appraisal concerns, mortgage qualification issues, municipal issues --- things can get very interesting after you make your offer. (This also points to the need for attorney.)

 

7.       Know that contingencies are likely not to be considered. Standard contingencies like attorney review, mortgage financing and inspections are fine.  Concessions for closing costs are routinely considered.  Sale of existing real estate, repair requests (unless related to health or safety) ---not so much.

 

8.       Beware of tenant-occupied homes.  I have seen listings where the REO company will cede responsibility for tenant eviction to the buyer.  This can be a nightmare in some cases.

Foreclosures can be a wonderful opportunity to purchase homes that might otherwise be outside of your price point.  Like any other real estate transaction, however, this is a major financial purchase and should be treated as such.  That being said, this is a great market for buyers. 

Comments (9)

Deborah Byron Leffler BzyBee Real Estate Lady!
Keller Williams Realty Boise - Nampa, ID

This is a great list for buyers!    It isn't easy to buy an REO but you have clearly shown them how it can be done with less stress!    Suggested!

Aug 08, 2011 01:47 PM
Millie Lumpkin
EXIT Strategy Realty - Chicago, IL

Thanks Deborah!

Aug 08, 2011 01:50 PM
Debbie Holmes
John L. Scott - Boise, ID
Gets the job done!

That is very well said...  I keep hoping for a normal sale....

Aug 08, 2011 01:58 PM
Millie Lumpkin
EXIT Strategy Realty - Chicago, IL

Yeah....the new normal. Less frustrating than a short sale though.

Aug 08, 2011 02:18 PM
Kym Wright
Prudential California Realty - Olivenhain, CA

Thank you for this post!  I have thankfully only had one REO and it was FHMLC owned, very easy.  I will keep this for my next difficult one!

Aug 08, 2011 02:34 PM
Florida Tolbert Team Keller Williams Advantage
Keller Williams Advantage III Realty in Lake Nona - Orlando, FL
Keller Williams Land Luxury Division Specialist

Great list for buyers to wake them up to reality.

Don't be surprised if more than a few reblog this one.

 

Aug 08, 2011 03:07 PM
Jerry Newman
Brown Realty, 210-789-4216,www.JeremiahNewman.com - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hi Millie, Welcome Back. We missed seeing your blogs. You have pointed out some Great Tips for buyers looking to purchase those foreclosed homes. Keeping the Stress out of the process will certainly make everyone feel a lot better in the long run.

Aug 08, 2011 04:47 PM
Millie Lumpkin
EXIT Strategy Realty - Chicago, IL

Kym - Some markets have been hit harder by foreclosures. Hope he info is useful

Kevin - Thanks.

Jerry - Thanks for that. I don't know if we can completely eliminate the stress but hopefully more knowledge can reduce the stress.

Aug 09, 2011 04:35 AM
Paul Gapski
Berkshire Hathaway / Prudential Ca Realty - El Cajon, CA
619-504-8999,#1 Resource SD Relo
 

yes they look so nice but Foreclosures are such tough on to stomach.

Nov 14, 2011 06:26 AM