what is process of buying a foreclosed home with cash?

  • January 21 2013 - Rex
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Answers (5)

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I want to know how to buy a home at the Alameda County Superior Courthouse and can a person bring a bank statement with a check in hand to bid at the courthouse for a home? Where can a person buy title insurance?
  • January 22 2013
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Simply make them an offer based on what you want to pay. Let them know it's cash. Be certain to have either an account showing the funds to close or some proof of funds showing your ability to perform. With cash offers you won't have many options on the homes condition. These homes are sold "as is" almost always. That being said, in a cash deal even the termite inspection would not be part of the deal unless you write it in. When other buyers are getting loans, the lenders require clear letters on the termite inspection. For cash everything is waived and you are getting it with no recourse on the termite. Just be certain you have done your homework before to write the offer. You don't want to buy the " money pit ".
  • January 22 2013
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If you are correctly using the term foreclosed (past tense) then it has gone through the foreclosure process and is now owned by someone or something - like the bank that had the loan. It is then a bank owned home and you buy it just like you buy any home with cash.

tim
  • January 22 2013
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It's the same as buying a home using a bank loan with a few differences.

When you present your offer, you will need to show 'proof of funds'. This can be a bank statement or letter from your bank to show you have the funds on hand to close.

With cash offers, banks will often require a shorter closing window as you won't need bank approval. This can work in your favor if the bank wants to unload the property. You will just need to make sure your title company can close within the time period allotted by the bank.

Once your offer has been accepted you often will need to have the signed purchase agreement and earnest money check (in the form of a cashiers check - no personal checks) sent in within as little as 24 hours.

Just make sure you request an inspection (even if the home is sold 'as is') Foreclosed homes are usually in tough shape and will have years of neglect. And always buy title insurance to protect your investment. Often cash buyers neglect title insurance as there is no bank to require it be purchased. This will protect your investment should it be determined there was outstanding liens or title errors discovered after closing. Without title insurance, YOU are liable for any losses.

  • January 21 2013
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It is important to know what stage the home is in as it pertains to the "foreclosure" process. A PRE Foreclosure would be a property that has a recorded NOD (notice of default) but does not have a scheduled auction date, a home that has a recorded NTS (notice of trustee sale) has a scheduled sale "auction" date in which the home will be offered for purchase in a public auction commonly held in front of a local courthouse. If the property is not purchased by a 3rd party bidder (someone other than the owner on title) then the property will be sold back to the lien holder "beneficiary" for the amount of the opening bid, in which the property now becomes bank owned an assigned to an REO agent to market and list for sale. Pre foreclosed properties can be purchased off the MLS as well as Post foreclosed (bank owned) homes. Auction homes must be purchased at the court house steps, CASH ONLY, in the county that the property is located within. This is public information and can be found in print in your local newspaper or through a 3rd party service via the internet that you can pay a subscription fee to receive more "real time" information about the auction and the properties being offered.
  • January 21 2013
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