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Buying a Real Estate Foreclosure
Buying a bank owned home is preferred by many because of the non-emotional process and ability to close quickly; compared to buying from a distressed property seller. Below are some tips for buyers and investors of foreclosure properties.
Foreclosure Buying Tip #1 – Not all “REO‘s” or Bank Owned Homes are good deals.
Many banks want market value in order to recoup as much of their losses as possible. Others are more concerned with liquidating their REO inventory as these non-performing assets have a negative impact on their books. Speak with a Foreclosure Specialist with The Local Realty Real Estate Team to learn which bank owned assets can give you the best value.
Foreclosure Buying Tip #2 – Get Pre-Approved From A Lender Willing To Do “Cross-Qualifications”
If you’re trying to buy a property from, say Bank of America, it can help to get a pre-approved mortgage from Bank of America. Doing so may cause lenders to look more favorably on your bid if it’s similar to others. Since you may not know which bank you may be purchasing your next Foreclosure from, we recommend being pre-qualified through a local direct lender that can complete a “cross-qualification” for you. It is important that your loan officer be able to do this promptly and possibly multiple times without charging you extra.
Foreclosure Buying Tip #3 – Limit or Remove Your Contingency Periods.
When buying a foreclosure in California, you should assume that you will be competing against a cash buyer. In order to make your offer just as (or more) intriguing than the cash offer, you may want to consider limiting or removing contingency periods. We recommend a 10 day inspection period to start. If you really want to go for it, remove your appraisal and loan contingencies. There are several ways to make your purchase offer more intriguing while still protecting yourself. Speak with The Local Realty Foreclosure team to learn more.
Foreclosure Buying Tip #4 – Increase Your Initial Deposit.
Who’s not intrigued when more money is at stake? Banks like to see high initial deposit amounts. This shows a more solid commitment to close escrow. If you’re putting 10% or more as your down payment, think about making this your initial deposit amount.