Buying a Foreclosed Home

There are many good reasons to purchase a foreclosed home; however the road is not always straight and narrow especially if you are new to the process.

The first item on the agenda for purchasing a foreclosure is finding an agent who has knowledge of the process and has the tenacity to pursue the correct departments within the bank. Not all agents have experience working short-sales or foreclosures.

Secondly, finding a foreclosure can be more difficult than the commercials lead you to believe. There are plenty of short-sales available, however these differ from foreclosures because the bank has purchased the home during an auction process and is now willing to sell it at a bank determined asking price. The price can be very appealing so the home will go quickly. The short-sale, in contrast to the REO (Real Estate Owned by the Bank) synonymous with foreclosure, has not been purchased back by the bank. Short-sale transactions from beginning to end can take several months to negotiate and come to fruition. And, short-sales only close if the bank is willing to take short of what the mortgagor owes.

An REO (Real Estate Owned by the Bank) another term for foreclosure has gone through all the legalities regarding the foreclosure process. Typically, the bank sends an agent they trust out to the home to do a market analysis called a BPO (Broker’s Price Opinion). We at SD Realty Pros are certified BPO agents, and have been certified by the National Valuation Standards Institute. We know how to contact the different divisions within the bank. This speeds up a somewhat slow process to begin negotiating on your behalf with the bank. We also know what forms and other paperwork the bank requires. Banks like to work with people who know what the bank requires because the banks are not in the business of training people.

Lastly, you will be competing with investors for REO’s/Foreclosures; investors have cash. Investors want the same bargains all buyers want, and many times the bank will take less in cash even if another buyer has been pre-approved for a loan that would give the bank more profit. However, now and then you will find the gem you have been searching to purchase as a foreclosure, so make sure you are connected to a Realtor who can get the job done for you.

It’s only a "Buyer’s Market" if you buy! Give us a call at SD Realty Pros, and we’ll make sure you are prepared to make that great deal on a foreclosure.