Tag Archives: buying a foreclosure

Q: We are buying a house from an investor that buys homes after foreclosure and fixes them up. Is there anything extra we need to do to protect ourselves? — Kay

A: Yes. This is a popular investor strategy in South Florida and other areas hit hard by the housing crash. This can work out very well if it is properly done, resulting in a profit for the investor and a reasonably priced, newly upgraded home for you.

However, you as the buyer are smart to be extra cautious due to the dangers of both buying a foreclosed property and construction in general.

You will need to carefully review the title insurance commitment to make sure that the foreclosure was performed and concluded properly and that all issues have been cleared up. You will need to go to the city and county and make sure that all permits were properly obtained and closed out, both from this renovation and any from the previous owners. Make sure there are no code enforcement issues and that the homeowners’ association is paid up and the renovations are in compliance with community guidelines.

Pay particular attention if there are any additions to the house, making sure that they were permitted and are up to code. When the renovation is complete, ask for proof that all of the contractors and subcontractors were paid in full.

read more at: http://articles.sun-sentinel.com/2013-09-15/business/fl-ask-a-real-estate-pro-091613-20130915_1_renovation-investor-gary-m

It’s still possible to buy a foreclosure and make it the home of your dreams. It’s just harder these days.

Investors, both individuals and national corporations, are rushing into the market with the intent of turning foreclosed properties into cash-generating rental units.

Lenders are only slowly listing homes for sale at a time when the general appetite for home purchases is increasing. Demand for properties is leading to bidding wars and higher prices that aren’t necessarily justified by appraisals, putting deals at risk.

Contact the appraisers at www.scappraisals.com for your value and appraisal questions.

All that being said, there are still plenty of foreclosed properties out there. In the 12 months ended in February, more than 20,000 foreclosures were completed in the Chicago area, according to housing analytics firm CoreLogic. Most will become bank-owned and eventually put up for resale.

Homebuyers just have to find the right property. While they have to demonstrate patience in their search, they need to move fast and effectively once they find it.

“The consumer gets burned on a house they really like once or twice,” said Michael Goodwin, an agent at Exit Real Estate Partners. “After that happens, they get war-hardened. The next time they are ready to pounce. Not very often does it wind up being the first house. It takes them getting slapped in the face.”

There was competition for properties a year ago too, but real estate agents say this year’s foreclosure market is different.

Across the board, agents find that foreclosures are being listed at far less than what they will likely sell for, a smart marketing strategy that is having the intended effect of generating interest and multiple bids.

read more at: http://www.chicagotribune.com/classified/realestate/foreclosure/ct-mre-0407-podmolik-homefront-20130405,0,407735.column

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