If you’re looking for a bargain and considering purchasing a foreclosure, you’ll first have to decide what kind of foreclosure property to pursue. The three categories are Pre-Foreclosure or Short Sale, Sheriff’s Auction, and Bank Owned which are called REO for Real Estate Owned by the bank.
Short Sales are in the process, but have yet to be foreclosed on. Your offer will have to be negotiated with the lender as well as the owner, which makes the deal complicated and slow. Prices also tend to be highest in this category.
Next are properties that are being auctioned by the Sheriff. Inspections are usually unavailable for these homes, and the transaction can get very sticky. These foreclosures are often best left to contractors, investors and developers who are well versed in the challenges of properties with defects. Also, most of these are purchased by the banks that have the current loan on the property.
Finally, after the Sheriff’s auction, it is offered as an REO property. These may list at a lower price than the auction price and you may not have the option of a home inspection and may find repair surprises. You should have a title search to insure you have clear title to the property. However, you should still purchase title insurance to protect yourself from title problems that could come up in the future.
Since homes in this stage are offered in “as is” condition, make sure you have the financial ability to make the repairs that may be needed. Many lenders will not lend on a foreclosure property, so always discuss this with your loan officer if you are considering this option.
Contact the Kathy Henne Team RE/MAX FINEST by calling (937) 778-3961.