Foreclosures have been around for many years but certainly not in the numbers the real estate industry is experiencing today. They are not likely to go away in the near future, either. Foreclosed homes are not necessarily damaged or priced on the lower end. There are many mid or high-end homes available in good condition and at very reasonable prices. If you are in the market for a home, there are many things to consider in the foreclosure market, but you need a qualified Coldwell Banker Innovations REALTOR to guide you through the system to make the most of these opportunities.
First, decide your type of financing and your price limitations. Some foreclosure properties are sold through an online auction process and some by an individual real estate broker. Read all the fine print concerning the buyers’ obligations when purchasing a property through an auction process because frequently there are no contingency options concerning home inspections, financing contingencies, etc. Make sure you know what’s expected of you before submitting a bid.
Second, make note that all the properties are sold “As-Is.” Foreclosure properties listed with a real estate broker provide the option of having a home inspected to determine any repairs or maintenance items and the approximate cost associated with these items. The results of the inspection will allow you to make an educated decision regarding whether you want to proceed with the purchase of the property, in case additional financial concerns may incur after ownership. As foreclosure specialists, we will leave enough time after the contract is signed for the listing agent to have all utilities turned on for the inspection. Note that some banks (sellers) will charge you for the de-winterization and re-winterization of the home. This cost should be considered with other upfront out-of-pocket expenses so you have enough funds for closing (settlement).
Third, if you are purchasing your home with a government loan (FHA, VA, USDA), there may be repairs that appraiser/lender require to be completed prior to settlement. We can help ensure the appropriate allowance is stipulated in your contract to cover any repairs.
Fourth, many banks request you use their title company or settlement firm to perform the settlement or closing and are willing to cover some of the standard buyer fees as an added inducement. In Maryland, the buyer has the right to choose the settlement firm. This “right” can vary from state to state. You can choose to use the seller’s title company and also hire a second objective title company to alert you of potential title issues at an additional cost. There are many options concerning the title search. The main objective is to ensure the property is conveyed to you “free and clear” of any title issues. We will guide you through this process so there are no “surprises” after settlement.
These are some of the many challenges to consider when purchasing a foreclosure. Coldwell Banker Innovations specializes in foreclosure properties and we are here to help you through the process of settling on your future home. Contact us today to learn more!