10 Things to know about Buying Foreclosures

10 Things to know about Foreclosures in the Lehigh Valley Area – Thinking about Buying a Foreclosure, Bank owned, REO or Short Sale Property? Things you need to know first.

Foreclosure’s can be a great opportunity for a Home Buyer to get a property at a discounted Price.

BUT Before just jumping into this head first and ONLY looking for a Foreclosure to purchase…let’s make sure you know some details about buying a Lehigh Valley Foreclosure.

1) Typically a Foreclosure has been vacate for about 1 year BEFORE it has become available on the MLS for you to purchase. Typically, Foreclosures are sold & Listed at 20 to $30,000.00 under current Market Value.  Some are more and some are less.

2) Over 75% of the Time the Utilities in the property have been turned off and the home has been winterized. So, Bring a Flash Light to your showing 🙂

3) Not all Foreclosures can get financed by the standard FHA or Conventional Loan BUT can get financed by using an FHA 203K Streamline Loan.

4) The buyer will be responsible for turning on all the utilities in their own name to conduct any Buyer requested home inspections and leave the utilities on for the Mortgage appraisal, Homeowners Insurance Company Inspection and Municipal Resale inspection, if required.

5) The buyer will be responsible for ordering and paying for the Municipal Resale inspection for the purpose of getting a clear certificate of occupancy from the Local Municipality and also be responsible for any repairs that come up on this report.  These repairs do not need to be completed prior to settlement but usually will need to be completed and the property reinspected between 30 days and 1 year from the purchase date.

6) You can have your Real Estate Agent setup a search on the Lehigh Valley MLS to ONLY search for Foreclosured properties if you would like.  Just ask them to search the special condition of Bank Owned and this will accomplish your goal.  Today: 11-7-09 there are 247 Bank Owned Properties for sale in Lehigh and Northampton county.

7) Foreclosures come in the form of several different names: Bank Owned, REO “Real Estate Owned” , Foreclosure, HUD owned.  Depending on the type of Foreclosure and the Bank who owns the Home, will depend on the process in which you will be required to make your offer
and also the additional addendum’s you will be required to sign.

8) Foreclosures can take anywhere from 2 to 6 weeks just to get a reply from the bank.

9) Banks do prefer to have cash transactions, then conventional loans, then FHA loans.  But, do not be afraid to give it a shot if you are interested in a foreclosure…the worst thing that could happen is that your offer does not get accepted.  When your offer is going through the reply process and You are waiting on an reply to your offer from the bank…I suggest you keep watching the market just in case your offer does not get accepted.

10) Not all Real Estate Agents like working with Selling Foreclosed Properties.  So, make sure when you are looking for  a Buyer agent that you find out what types of properties they will help you purchase.

LAST NOTE: A Short Sale is NOT a Foreclosed Property.  A short Sale is a pre-foreclosure…this is when a homeowner trying to avoid the foreclosure process by conducting a short sale on their property.

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