6 tips for buying foreclosures
There are a lot of great deals in Santa Clarita and Castaic, but buyers beware: Purchasing a foreclosure is rife with pitfalls.
1. Don't get caught up in a feeding frenzy
Everybody and their grandmas are trying to buy foreclosures.
Those lowball prices represent golden opportunities, but they also attract dozens of buyers who may bid until homes are no longer bargains.
Don't get caught up in a bidding war. Instead, carefully calculate what you want to spend and do not exceed that price.
2. Get pre-approved from the lender you want to buy from
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.
Plus, you're not locked in if other lenders offer you better terms. You can always change your mind and get your mortgage from another source.
4. Consider fix-ups
Most REOs, the industry term for bank owned properties, are sold as is. Most banks will do nothing to the houses before the sale. Somtimes they will let the buyer complete lender required repairs and sometimes they will even pay for them. We just closed a house in Acton where this was the case.
Often, the former owners were struggling to pay their bills and may have neglected routine maintenance or they may have trashed the properties before leaving
So be willing to consider a home that needs some work -- but budget accordingly.
5. Hire a real estate attorney
Once banks agree to sales, they often want to move fast and load contracts up with legal mumbo jumbo. As a result, buyers often do not have the time or expertise to figure all the angles.
The solution is to hire a real estate attorney -- even in states where home sales are usually completed without one. Considering you're making a six-figure investment, the legal fees are cheap insurance against the risks. At Two 4 One Audra Call is our in house real estate attorney.
6. Wait to make an offer?
Homebuyers may be well served to wait before making an offer but in recent days in Santa Clarita most are sold within a week.
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