How to Buy a Foreclosure

Some of the best buys in the market are foreclosure properties, and the most important key is having a qualified foreclosure specialist to represent you

Buying a foreclosure home works in a similar manner to buying a home from an individual – in a quick step process you find a home, make the offer and close. Before buying a foreclosure you must first understand what a foreclosure is. There are many types of foreclosures. The two primary types of foreclosures are the foreclosed homes that are already owned by a bank (many times known as an REO), and the second type is a pre-foreclosure which is a home that is owned by a homeowner who is behind on their mortgage payments and the lender has posted the property at the court house for public sale to take the property back by default if the owner does not come up with the back payments owed on a property. A foreclosure in itself is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership thought the process of repossession of the property.

At NoForeclosure.com we post both Bank Owned Foreclosures and foreclosures owned by other lending institutions, Pre-Foreclosure Homes and Cash Only Foreclosures which are foreclosed homes sold only for cash or foreclosed homes re-sold by national a national re-seller of REO homes. On our web site not all markets have pre-foreclosures, but we are working on ways to research the data to post for potential home buyers to view. We utilize the expertise of real estate foreclosure specialists who have gone through our training to help us to provide the data to post. Our real estate specialists work hard to help buyers find property and sellers sell property. The foreclosure purchase process can be very competitive and as a buyer you need to be represented by a professional that knows the market. In some markets foreclosures sell the first few days they hit the market, depending on how undervalued the home is listed at. Some of our best finds for buyers are secured during this short view period. Although the process is similar to just buying a home, there are multiple obstacles to overcome and in this market the ones with the most knowledge are the ones to succeed. Bank owned foreclosures (REO’s) are our number one source of overall sales to help buyers find the best deals.

Bank Owned Foreclosures are one of the better ways to find good deals on homes.  These homes have already been taken back by the bank or lending institution and most of the homes can be purchased with a standard type of loan program, with FHA or conventional financing.  There are the 10 to 15% exceptions where the banks require the buyer to pay cash due to the homes property condition (as an example the air conditioner has been taken, or no appliances, or roof damage with water leaks, and so on). Many of the homes that are owned by Fannie Mae will qualify for their special Home Path finance program,  and could have had complete updates with new paint, new carpet and new appliances.  Most Bank Owned Foreclosures will provide a home buyer the opportunity to have an inspection providing a typical option period from 5 to 7 days on the average to allow the buyer a chance to get a home inspection.  Most Bank Owned Foreclosures require to close in 30 days, which is unlike many of the short sale properties that you will read about below that can take 60 to 90 days to close.

Depending on the equity that an owner has in their property, Pre-foreclosures Homes can be an excellent way to purchase a home. If the owner is posted for foreclosure and needs to close quickly, a well qualified buyer with a good lender (or cash) can come in and create a win win for all parties. Our NoForeclosure specialist in addition to representing buyers represents many sellers who need to sell quickly. When we are able to put all parties together we can facilitate the transaction and make the deals work. For buyers that are pre-qualified though a lender specialist at NoForeclosure.com we open up our private auctions for buyers to bid and take full advantage of a below market valued home. If a seller knows they are about to lose their home in a matter of days, sometimes 5 up to 20 days, they need to know that we are offering them the best alternative to have a committed buyer ready who has the ability to close on the property on time. We will work hard to facilitate these transactions within the time frame allowed. Although we are not 100% successful, in many cases it can be the best way to take a property to the market.

Cash Only Foreclosures are another type of foreclosed home that is typically for the cash investor for a property that need significant improvements, offered for sale as a cash only purchase.  By cash only this simply means that the home is in poor condition and cannot be financed with that normal FHA or conventional type of loan program.  It's not actually a suit case full of cash, it is purchased by a quit claim deed with a cashiers check or from a bank wire transfer.  Many of these homes at listed at below 50% of market value and for someone with the capital they can be good buys below market.

We are getting more and more requests today from buyers to look at short sales. First you need to know exactly what a short sale is. A short sale is a home that is listed for sale at a price that is lower than the amount of the mortgage amount. A true foreclosure specialist will tell you that in most cases you do not want to look for the short sale homes. Short sales can be good opportunities, but only if the lender has approved the short sale. If the short sale is not approved you can tie up your earnest money for months only to find out that the seller has not been approved for the short sale and the property cannot be purchased unless you pay substantially more for the property. Many buyers ask, why does the listing agent list that property at a price that the property cannot be bought for? And, the answer is they are looking for offers in an attempt to see what the property can be bought for. The seller has not lost anything in this process, and the buyer on the other hand loses time and potential money if they have started with inspections and appraisals. The bottom line is that short sales can be bought and sometimes for good deals, just have proper representation from a foreclosure specialist that understands the right questions to ask.

NoForeclosure.com is supported by our real estate specialist in each market. If you feel that our free service is beneficial to you as a buyer, help to support our agents by using them to help you find your next home. As a buyer the best thing about using one of our agents is there service to you is also FREE, the seller pays our fee. FREE service and FREE representation. Our real estate specialists know how to assist you on “How to Buy a Foreclosure”.

The best way to buy a foreclosure is to register at NoForeclosure and start working with one of our foreclosure specialists today. We understand foreclosures and the process to purchase to assist our buyers in getting exceptional values. If you are not registered yet, click on the FREE registration link and you can start your home search immediately with instant access to see our properties.