Profile picture for tangirl1970

How do I attempt to buy a foreclosure?

  • November 04 2013 - North Topsail Beach
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Answers (7)

If you haven't been pre-approved yet I recommend this be the first thing you do. So speak with a lender to apply for a loan and prequalify. When you apply for a loan, lenders like myself will need to look at several different things if you are trying to prequalify for a loan.

1) Proof of income for each person that will be on the mortgage which can be demonstrated through: one month of pay stubs, previous year's W-2 forms and tax returns, official documentation to demonstrate other forms of income (alimony, child support, etc.), and two year's tax returns if self-employed (all schedules, all pages)
2) Credit Report which they will pull
3) Employment History or Business Tax Returns if you're Self Employed
4) Personal assets such as: Recent balances and statements for bank accounts, most recent account statement demonstrating market value of any investments (stocks, bonds or certificates of deposit), documentation showing interest in retirement funds, face amount and cash value of life insurance policies, value of significant pieces of personal property, debt information, the balances and account numbers of your current loans and debts, including car loans, credit card balances and any other loans you may have.

These are just a few things you should have ready when you begin your buying process for the foreclosure. Well I hope this helps, if you have any other questions or need a loan please contact me through the information on my profile page. I hope this helps and good luck!
  • November 04 2013
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Profile picture for Dunes ..
Depends on what you mean by "Foreclosure"...seems different people have different ideas of what that is...
County auction, Bank owned, Gov. owned?

You can click on Post Reply if you wish to add to your question or participate in discussion/explanation

The Fed Gov has Sites for its Properties for sale/Info on programs, how to purchase ect...
HUD Homes...Fannie Mae(HomePath)...Freddie Mac(HomeSteps)
You can find the links to the Gov sites here...Link

Many Banks have created Sites for the Public to use (For Free) to view and find Information about the Properties they have Listed for Sale, programs ect.
Sites Like..Bank of America...Wells Fargo...CitiMortgage

You could check out some Auctions Sites but due diligence is required..read the fine print ;)

Williams & Williams Real Estate Auctions | Real Estate Listings

Bid4Assets.com | Online Real Estate Auctions

Auction.com


Learn to use Public Records and learn what tools are available or not available in the State/County or City where you are or are interested in
Free Public Records Directory

Using an Agent may be required with Bank & Gov. Properties/Programs

As far as the cost of an Agent being Free to you as so often tossed out..
More of a sales pitch than a fact imo
Any seller who is able to if they have any intelligence at all will add their expenses/costs to the Sales/Purchase Price..
Commission is an Expense.
You decide for yourself if the Agent is free to you..form your own opinion

When choosing an Agent Shop Smart, it's a very important decision/selection and their are Many Agencies/Agents competing for clients

Know your options and what is allowed in your State so you can make the choice that best fits your needs & goals
Example: Rebates are legal in NC
From the DOJ Anti-Trust Web Site...What are the laws in your state?
Competition & Real Estate

Shop Smart & Happy Hunting


  • November 04 2013
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Profile picture for DFisherBroker

Buying real estate is typically a large investment with a significant amount of risk. Purchasing a foreclosure on the courthouse steps is a transaction which has additional risks including rights of redemption, federal state and local tax and other liens, rights of senior mortgage holder, owners associations and tenants, title problems, violations of zoning building and other codes or owners association violations, actions by upset bidders, and time and interest rate risks. For the buyer who decides to pursue purchase of a foreclosure on the courthouse steps, they should invest a significant amount of money to protect themselves.  Most buyers will position themselves take best advantage of this unique real estate opportunity by conducting methodical due diligence , remaining  unemotional about the transaction and having large cash reserves –a minimum of 20% of the bid price is recommended.

 

Start with obtaining the local legal paper (in Charlotte, this is the Mecklenburg Times) and find properties that are of interest and that have a total mortgage payoff below the likely value of the property. When a foreclosure date is set/certain, hire a real estate attorney to do a title search and advise you of all covenants codes and deed restrictions, existence of other liens or notices of foreclosure action, and the insurability of title with a preliminary title policy quote.

 

At a minimum, in additional to title search, your due diligence should also include: hire a licensed home inspector to review the condition of the home and provide a written report; hire a termite inspector to make sure nothing needs treatment or repair; do a radon test; get a boundary survey showing all improvements, setbacks, zoning, easements, and utilities and verify if the property is in a flood plain; get an insurance policy quote appropriate to property value, condition and your future intended use for the property; check with the Homeowners Association Manager for payoffs and transfer fees; and check with the County and City to verify if there are any zoning building or other restrictions or violations. There may be additional due diligence required for certain types of property and conditions.

 

Verify the local procedures and requirements for bidding and have all required documents and payments available on and in the precisely correct form on the day of bidding. Determine your price ceiling. Many investors use the rules of thumb that total acquisition price plus repair total investment into the property = 75-85%% of the appraised value AND that monthly net operating income is 1% of total investment. Consider hiring and paying a Realtor to represent you in the transaction. Your attorney and your CPA should also advise you on the alternative and optimal tax and legal strategies for holding title and protecting against liability.

  • November 04 2013
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You should really get an idea of what market you are dealing with before anything.  Your real estate agent can provide you with market data concerning any area you are interested in (buyers market vs. sellers market).  It will give you an idea of the type of buyer competition you will be dealing with.  Also, if the property is an attached single family, is it rentable?  If so, it will bring many more investors into the picture.  Always remember, on foreclosures "Cash is King"! 
  • November 04 2013
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You and your agent if any should preview the property and gather some initial public informations about it from the title company, Check the MLS and read directions carefully. Use your State's Residential Purchase Contract, Your offer should include REO or short Sale Advisory
 (if applicable), Copy of Deposit, Proof of Funds and Pre-Approval Letter from the lender.
  • November 04 2013
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Profile picture for Sharon Lewis
Contact an agent who will act as your buyers agent to help you do this. An agent working for you , doesnt cost you anything but can save you time and money by identifying potential issues with the house, area etc and by negotiating on your behalf. Hope that helps
  • November 04 2013
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Profile picture for Rebecca Marvel
The property will need to be listed first and (most times) they will require property be on market a minimum of 7 days before they start negotiating with buyers.
  • November 04 2013
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