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how do I buy a foreclosure?

Can anyone tell me the steps to buy a foresclosed home?
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August 10 2013 - Lawrence
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As mentioned below, the steps are the same as purchasing a non foreclosure home, but would recommend an attorney review the title work to ensure there is nothing that may come up in the future that would effect the owership.

Any particular reason you are looking for a foreclosure?  Lately, I'm not seeing any bargains with Foreclosures vs. regular sales, unless the property is in poor condition. 

Be aware, banks may not finance a foreclosure if it needs too much work to make it habitable.
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August 10 2013
Even if you are working on a limited budget, a foreclosure may not always be the best option.  They often, although not always, need a substantial amount of work.  The buying process doesn't differ much from purchasing a "normal" sale, except that the time frame may be longer because it can take awhile to get a response from the bank.

I would suggest that you have your daughter contact an agent who can review listings with her in her preferred price range, then schedule showings at those properties.  She may be able to find a better deal on a non-foreclosure sale that does not require as much work.  If she is not currently working with an agent, I would be happy to assist.  Please feel free to contact me if I can be of assistance.  Best of luck!

Tricia Nibarger
Realtor, Platinum Realty
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August 10 2013
Foreclosure listings are mixed right in with the rest of the listings.  As a local Lawrence Kansas area REALTOR, I can separate the listings into REO (Real Estate Owned) aka foreclosure properties where you can receive an email alert whenever an REO comes on the market.  The best deals are SOLD very quickly and quite often have multiple offers so you need a local expert who can help you with advice every step along the way.  Owner occupied buyers receive a "First Look" before investors on most REO's so you will have an advantage for a short period; usually 10 to 15 days.  Then the REO is opened to all buyers.  Once you select a local expert for your buyer agent he/she will walk you through step by step and answer all your questions.  Call if you need assistance.
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August 10 2013
We are seeing in Florida, more deals and opportunities as we have many more foreclosures on our markets. A bank will not provide a loan on a property that does not have a clean title, because they do not want to put their money and resources at possible risk, so if you buy a foreclosure, make sure you get a clean title, if buying from an auction house, you probably will NOT get a clean title, they don't offer them, instead they offer a Special Warranty Deed, it is up to you to go to a title company and have them run a title search against the property, probably cost 100 bucks, but cheap insurance to make sure there are no crazy IRS or HOA liens on the property. Local tax liens stay with the property, so if the house has been empty for many years, there may be lawn maintenance liens on the property, you would have to work with the local government on wiping or reducing those liens.

Best advice is to find a Realtor, interview a few, and find one that works to acquire Foreclosures, odds are they have done this before, know what banks offer in financing for as-is and if they offer any construction loans on top of the loan to purchase the property. They are out there and growing, as banks need to put capital to work.

Get the title checked, before you make an offer.

Best of luck to you,
Liz
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August 10 2013
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Craig,

My daughter and her three kids need a home. Her budget for a home is lilimited. I thought of foreclosures but did not know how to look for and help her find a home. Any help would be appreciated.
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August 10 2013
the closing officer will check the liens if any and make sure clear title is pasted... the same as any other real estate transaction... Craig is correct many foreclosures will require cash if in poor condition as lenders will be reluctant to lend on un-inhabitable properties.  However, (again depending on who has foreclosure) they may have a rehalb loan available 
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August 10 2013
depends on who has or is holding the foreclosure.... but the basic steps are the same as buying any other home.  They may require additional paperwork to be filled out (each bank, including HUD and Fannie Mae have different addendums to the sales contract).  Also if its listed through homepath you will need a realtor as they require a broker number to submit an offer (I'd advise 1 for all foreclosures as they are more involved) .  Also in most cases the closing costs are higher on a foreclosed property then a home of the same price that is not foreclosed!!
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August 10 2013
 
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