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im interested in a foreclosed property....How do i get started

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December 23 2008 - Charlotte
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We already answered the question on January 7th and January 9th. Scroll down to read the posts. Zillow will not allow us to answer the post twice -- the answer remains the same:


Call a Realtor&Call a Lender. Get a List of Foreclosures. Get Prequalified to know which ones you can afford.

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March 11 2009

"Make the bank order a second and if necessary a third appraisal. Or find a different lender. "

Nathan,

Those are your exact words...the appraisal requirements that are being put in place on 5/1 are being put in place to prevent lenders from influencing appraised values...It looks like yet again legislation is going to miss the mark. 

you may want to read the code of conduct...

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March 11 2009

Abroome,

With little to no experience your best bet in obtaining a foreclosed property is to purchase bank owned property.  At that point the foreclosure and eviction of the current homeowner or  tenants has taken place.  Combine that with an unencumbered title and you have far less risk.

Banks rarely if ever sell property directly, they list the properties with Realtors.

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March 11 2009
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Is anyone going to help abroome and answer his question?
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March 10 2009

One major problem with appraisers is their lack of adjustment for quality of construction. I wonder if some of them even own a Marshall&Swifts Guide to Construction Costs. Not "weighing" their opinion in favor of quality construction has led to over valuing some properties, while undervaluing others.


Just because two homes are located next door to each other, with exactly the same bedrooms and bathrooms and square footage, does NOT mean they are WORTH the same amount. But this often seemed "good enough" to many appraisers.

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March 10 2009
And I never said to order a new appraisal if it was not what the buyer "wanted or needed" ... that's a misstatement of what was said. I said to order a new one if he disagreed with the Opinion of Value as stated by the Appraiser.

According to the NC General Assembly: "Appraisal" or "real estate appraisal" means an analysis, opinion, or conclusion as to the value of an identified real estate or specified interests therein performed for compensation or other valuable consideration."

Note the use of the word "OPINION". Because the actual appraisal form repeats this word. Stating that is is only good on the day on which it was performed.

And more to the point, where there are two or three or more appraisers, they may and often do, have different opinions of value. To not explain this to a client would be unprofessional.
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March 10 2009

I bet a bunch of the mess with the lending situation would never have happened if we still had local lending with local banks. The problem is actually with huge banks, lending in places they weren't even located, relying on underwriters who were hundreds/thousands of miles away. It's still a problem when you have to deal with a loss mitigation department that's located in Texas, and an underwriter that's in Chicago, trying to approve a shortsale or mortgage in North Carolina.


I don't have these problems with banks and credit unions that are still lending their own money to local clients.

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March 10 2009

Your answer is completely off the subject. My comments you are quoting are taken out of context in this post. They were related to a CONSTRUCTION LOAN post wherein the buyer himself stated that the market value was quite a bit higher than the appraisal.


And I was indicating to him that this is not uncommon. And that if he asks most banks WILL order a new appraisal if the value is considerably different from the contract price which had previously been approved by the bank. If this is not common in Massachusetts, I stand corrected. But is is VERY common in North Carolina, and especially with construction-permanent loans. Even at the "desk review" many banks find the need to make adjustments to appraisals. Each market is different and each state sets its own standards for appraisers.

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March 10 2009

Well then you have no clue about dealing with these lenders.

Case in point. A lender TODAY, Litton Loan, admitted on a RECORDED phonecall, and in a confirmed email, that they would order a THIRD appraisal-- at THEIR expense to determine the TRUE market value of a property on a short-sale they were approving. The previous two appraisals and two additional BPOs were all over the place on the property. The property is listed at over $900k and the appaisers and agents involved are all stating different market values. They are not charging the buyer or the seller for ANY of these!


To think that lenders won't do this shows your own lack of understanding of how banks are working in today's climate.

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March 10 2009
Nathan,

Telling people things like ... if the appraisal isn't what you want or need make the lender order a 2nd and or 3rd appraisal or go to another lender is just one example of horrible advice you have given in regards to financing.  Not to mention that approach to real estate and lending is a major part of why our industry is in the mess that it is in.  I am sorry if you feel that is personal...it's not...it is purely a professional attack!
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March 10 2009

Get a clue. I have a great lending knowledge. I'd be happy to give you references to EVERY lender with whom I have ever done business during the past 10-years. I completely understand the Real Estate Transaction from Begining to End. And this includes the financing.


Without the foreknowledge of the Financial Aspect of the Transaction, it is impossible to write a contract. I would agree that many Real Estate professional (I use the term "professional" lightly) are inexperience and uninformed as to the way mortgages, credit, and lending work. But I am not one of those who are uninformed. From commercial lending, to construction lending, to FHA, to Conventional, to Lease-Purchases and other forms of Seller Financing, I've been involved in all types, both personally and professionally.


Your personal attack is unwarranted.

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March 10 2009
How's about this...Realtors talk to clients about real estate and lenders talk to clients about financing...
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March 10 2009

It's funny that the Mortgage Lenders say, "Contact a Mortgage Lender" to get "pre-approved".

And the Realtors say "Contact a Realtor first".


Let me explain why you should contact a Realtor FIRST. Because the Realtor can actually answer your questions about they ENTIRE process of homebuying. And what is involved in purchasing a foreclosure property. Whereas, a Lender will only ask you questions about your desired purchase price, income, and qualifications to purchase. They are not qualifed nor are they able to advise you on the questions you are wanting answered about the properties you want to know about.


With that said, once any client contacts me, as a Realtor, I ALWAYS recommend that their next step is to contact a Lender to get pre-qualified so that we will know what price-range in which to start your home search. A conference call with a Realtor AND a Lender is not a bad idea. I often have this type of call with clients.


And just to be clear, you don't have to have a mortgage or pre-approval to view list of foreclosure properties.

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March 10 2009
i agree with a number of mortgage proffesionals below.  CONTACT your Mortgage proffesional first.. a realtor will tel you the same thing is this market.  Lending can be tricky depending on your credit and % down. 

On a side note Foreclosures DONT = good deals.. they do often = headaches and problems.  Especially if you cant get a good amount of time in the property such as at auction.  I know multiple customers who have bought headaches and regret it.  for the same $ if you can find something decent and purchase from a distressed seller rather than a bank owned home....your better off.

Often the lender wont lend on the home is there signs of: mold, pain peeling, rotten wood, problems with HVAC, roof, plummbing ie leaks water damage. 
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March 10 2009
1. Contact a Realtor for a free list of foreclosures. This information is available from many sources, but a Realtor will already have the work done for you, and will know how to help you make the offer on the property once you are ready to buy.
2. The Realtor will recommend that you get a pre-approval or full-approval letter from a lender, unless you intend to pay cash for the property. The Realtor can help you also to determine which lender and/or financing offer may be best for you and your situation.

3. Work with the Realtor to determine if the Foreclosure is worth the money, then make an offer. You will need some cash to put down as a Security Deposit or Earnest Money. So, this is why you will need to make sure you can qualify for a mortgage BEFORE you make the offer. Because the seller will try to keep your money if you walk away from the deal.
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January 09 2009
Be careful on foreclosures. If you can't afford your mortgage, it's been a lot longer since you did a repair.
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January 08 2009
Profile picture for SoCal Engr
1.  Buy a house.
2.  Quit paying the mortgage.

The rest just kind of takes care of itself.
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January 08 2009

1. Call a REALTOR for some FREE advice. If you already know what property you want, you can fill out the paperwork with them and they will help you make sure you are fully protected.


2. Get a Loan. Your Realtor can probably recommend a bank for you to get approved for the mortgage. This will help you know you can afford the home you want to purchase. Some sellers want to know you can afford the house before you make them an offer on a Foreclosed property.


3. Find a Property. Your Realtor has access to nearly all of the Foreclosures in the Charlotte-area. The banks like to deal with Realtors because they help make certain that the transaction is legal and correctly performed. Your Realtor can email you photos and prices of foreclosed homes.


If I can help, click on my profile or post again and I will answer your questions.

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January 07 2009
abroome,
I would suggest that you find out if you are credit worthy and get yourself pre-approved.  Here is the kicker to buying a foreclosed home.  The word foreclosed is not a huge problem, but the condition may very well be the deal-breaker.  Many conventional lenders do not want "fixer-upper" projects, so keep that in mind as well.  I had an excellent borrower with 20% down.. great credit, ratios, money, etc...  contracted on a home with a 1/2 completed bathroom (foreclosure).. It was minimal in dollar amount to complete BUT the lender (Provident for those in my field) said NO (unless completed prior to closing).. Seller (Countrywide, said NO)..We were able to fund and close with another CONV lender without the bath needing completion prior to closing, but the lesson is that RE contracts and Mortgage Guidelines are 2 worlds apart.  The condition of the property is critical as there are millions on the market and the BANKS do not want to knowingly lend on projects or trash.  Happy Holidays.
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December 23 2008
Contact a reputable mortgage professional and get pre-approved. Most foreclosures require a written pre-approval from a lender as opposed to just a pre-qualification. A pre-approval entails actually submitting a file to a lender for underwriting, you will need your employment and financial information. A mortgage professional can guide you through the process. After you are pre-approved you can contact a realtor to make a bid/offer. Best of luck
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December 23 2008
 
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