Whether searching for a budget-priced home or an investment property, many people turn to the “Foreclosures” section of online house hunts or newspaper ads.  Sure, the price is a bargain, but there are some drawbacks to purchasing a home that is in foreclosure. Take these tips into consideration before you head to the auction: 

• Most foreclosures have been unoccupied for several months and will surely be affected by that. You will need to be willing to put in some work and some cash to bring it up to code/living conditions. 
• If the house is on the auction block, you will likely need the full purchase amount in cash, as the lender or bank is looking to recoup as much from the defaulted loan as they can. They do not allow time for financing to take place. 
• Some states allow redemption to the homeowner, and HUD defines this as “…a period after [the] home has already been sold at a foreclosure sale when [a homeowner] can still reclaim [their] home.”  

• Because a foreclosed property is sold “as is,” you will not receive any disclosures, meaning, a home inspection is a must!  Depending on who owns the property will make a difference in how much time you must complete the inspection.   
• On the other hand, if the property is REO (real estate owned), you will be able to go through the home-buying process in the usual way and have time to secure financing for your purchase. 
• An REO will be sold as-is just like an auctioned house, and all repairs will have to be done by the new owner–there are no repair requests or contingencies granted. 
• For buyers that are new to the foreclosure-purchase game, going through a bank to buy the property is your best bet versus auctions. Once you gain some experience in the process, try your hand at auctions. 
• For any distressed property, make sure you have a title search performed. Buying a foreclosure takes long enough, and you want to make certain you will not run into any roadblocks. 

For your foreclosure-hunting convenience, realtor.com® has a search page specifically for foreclosures!   Check with your municipality for notices on tax foreclosures, and if you have the funding, pre-foreclosures and short sales are other property bargains.  Remember to connect with a Realtor® that is experienced in distressed sales. Their knowledge and expertise can make a drawn-out process go smoothly! 

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently.  You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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Photo credit: The Tennessean 

While looking through real estate listings, you might be curious when you see a property up for auction or one that is “real estate owned,” and wonder if the price is too good to be true.  There is a process of buying a foreclosure house, and you need to prepare yourself, so read on for some pointers on what’s involved before you make your decision: 

• A “Bank-Owned Home” is just that:  the owner stopped making payments, and the lender is in the process of auctioning the home to try and recover the money they loaned.  Houses that are “Real Estate Owned” mean that the bank’s auction didn’t result in a sale and is being sold through a real estate agent. 
• Vacant homes can have all sorts of issues: mold, vandalism, pest issues, stolen copper piping, and neglected landscaping are just a few.  Before you make a bid, go and see the home for yourself, and decide if you can afford the sale price plus the cost of repairs. 
• Hire an inspector to go to the house with you so you’ll have an idea of exactly what needs to be done.  You don’t want to underestimate renovation costs. 

• When considering the asking price, and you have taken steps to get a contractor bid on all the rehab, use this formula to calculate your offer:  80% of the appraised value minus the cost of repairs. 
• Investing in a foreclosure as a rental will require less trendy but rugged materials and flipping to resell might be more expensive (and more headache!).  Moving into the home yourself can keep initial costs in check if you’re willing to do what’s necessary before moving in and holding off on upgrades. 
• Some foreclosure purchases must be made in cash, and that can put investors at an advantage.  In case cash isn’t a requirement for the purchase, have proof of pre-approval from your lender when you make your offer. 

Whatever your reason for your interest in buying a foreclosed home, make sure you do your research, and talk to your bank as well as an experienced REALTOR®.  Search for foreclosures by locality and beware of anyone offering to sell “their property” that is in foreclosure.  Con artists are smart enough to find vacant properties to pass off as their own, sell them, and take the money and run. Educating yourself on the foreclosure purchase process will make for a smoother process, less stress, and hopefully an investment that will pay off for you! 

Access Teri’s one-stop Orlando FL home search website.

Teri Isner is the team leader of Orlando Avenue Top Team and has been a Realtor for over 24 years. Teri has distinguished herself as a leader in the Orlando FL real estate market. Teri assists buyers looking for Orlando FL real estate for sale and aggressively markets Orlando FL homes for sale.

You deserve professional real estate service! You obtain the best results with Teri Isner plus you benefit from her marketing skills, experience and ability to network with other REALTORS®. Your job gets done pleasantly and efficiently.  You are able to make important decisions easily with fast, accurate information from Teri. The Orlando Avenue Top Team handles the details and follow-up that are important to the success of your transaction.

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Photo credit: socalhomebuyers.com