Buying Foreclosed Homes

[EmilyHicks]

I have decided to use FHA loan for my first home buying. I am getting advice that I should look for foreclosed homes that might give me 10% to 15% discount compared to a normal listing. I have several questions about buying foreclosed homes:

1. Do I need a realtor specialized in foreclosed home? My sister-in-law (our realtor with 2 yr experience) seems to discourage us from trying to buy foreclosed homes or short sale homes. Is she inexperienced, or the effort putting into buying a distressed home to cumbersome that it is not worth it?

2. Is there any problem with buying a distressed homes with FHA loan? I am planning to put about 10% down.

3. Is it true that buying distressed homes on average will give you 10 to 15% savings?

thanks,

[UCGal]

It seems that she’s discouraging you from a significant portion of the market.

Downsides of short sales and foreclosures.
– both need approval from the bank… which can take more time than a traditional sale.
– with short sales you also need approval from the “seller”. Ego’s could get in the way.
– with short sales there can be 2nd lien holders that can kill the deal.
– with short sales there are often short sale negotiators mandated by the listing agent… and paid for by the buyer.

That said – the market has too many foreclosures and short sales to ignore that inventory.

[UCGal]

It seems that she’s discouraging you from a significant portion of the market.

Downsides of short sales and foreclosures.
– both need approval from the bank… which can take more time than a traditional sale.
– with short sales you also need approval from the “seller”. Ego’s could get in the way.
– with short sales there can be 2nd lien holders that can kill the deal.
– with short sales there are often short sale negotiators mandated by the listing agent… and paid for by the buyer.

That said – the market has too many foreclosures and short sales to ignore that inventory.

[UCGal]

It seems that she’s discouraging you from a significant portion of the market.

Downsides of short sales and foreclosures.
– both need approval from the bank… which can take more time than a traditional sale.
– with short sales you also need approval from the “seller”. Ego’s could get in the way.
– with short sales there can be 2nd lien holders that can kill the deal.
– with short sales there are often short sale negotiators mandated by the listing agent… and paid for by the buyer.

That said – the market has too many foreclosures and short sales to ignore that inventory.

[UCGal]

It seems that she’s discouraging you from a significant portion of the market.

Downsides of short sales and foreclosures.
– both need approval from the bank… which can take more time than a traditional sale.
– with short sales you also need approval from the “seller”. Ego’s could get in the way.
– with short sales there can be 2nd lien holders that can kill the deal.
– with short sales there are often short sale negotiators mandated by the listing agent… and paid for by the buyer.

That said – the market has too many foreclosures and short sales to ignore that inventory.

[UCGal]

It seems that she’s discouraging you from a significant portion of the market.

Downsides of short sales and foreclosures.
– both need approval from the bank… which can take more time than a traditional sale.
– with short sales you also need approval from the “seller”. Ego’s could get in the way.
– with short sales there can be 2nd lien holders that can kill the deal.
– with short sales there are often short sale negotiators mandated by the listing agent… and paid for by the buyer.

That said – the market has too many foreclosures and short sales to ignore that inventory.

[SD Realtor]

In my opinion you are getting poor advice.

First off, if you plan to buy a foreclosed home using an FHA loan, you will have to be quite competitive when it comes to price. Second off, if you have been reading the posts here, with the way inventory is now, getting a home 10 to 15% off the listing price is not happening. Ask whoever is giving you this advice to pull up closed sales in the area of town you are looking at and give you the difference between list price and closed price. I think you will see that in no way does the actual fact bear out what you are being told. Third thing, when you get an FHA loan your home will be appraised by an FHA appraiser. There may be facets of the home that the FHA appraiser will want to have repaired, that the REO lender will not want to fix. Thus any home that is a serious fixer, that may be priced at a discount, may very well not pass an FHA appraisers inspection.

So getting back to your original question, yes it sounds like you need to work with someone who has practical experience in all types of sales, distressed, reo, short sales etc. At the very least the advice you appear to be getting is not helpful.

As UCGAL wrote a good percentage of the present and future inventory will be distressed. Short sales are frustrating but they do close and if you have patience they provide opportunity. Honestly in this day and age, to get a home at a serious discount, presume something is wrong with it and work will need to be done. If that is the case it may be more challenging to get THAT home with an FHA loan.

There should be no excuses not to look at all types of homes. Cumbersome or not the process is not that hard. You as a buyer should expect to know AHEAD of time what to expect and how the process will roll out regardless of whether it is a short sale or an reo or even a standard sale. You should also be explained the EFFECTS that your financing decisions will have on your real estate transaction….ie will it help or hurt my odds of getting a place in a competitive situation.

It doesn’t sound like you are getting that.

[SD Realtor]

In my opinion you are getting poor advice.

First off, if you plan to buy a foreclosed home using an FHA loan, you will have to be quite competitive when it comes to price. Second off, if you have been reading the posts here, with the way inventory is now, getting a home 10 to 15% off the listing price is not happening. Ask whoever is giving you this advice to pull up closed sales in the area of town you are looking at and give you the difference between list price and closed price. I think you will see that in no way does the actual fact bear out what you are being told. Third thing, when you get an FHA loan your home will be appraised by an FHA appraiser. There may be facets of the home that the FHA appraiser will want to have repaired, that the REO lender will not want to fix. Thus any home that is a serious fixer, that may be priced at a discount, may very well not pass an FHA appraisers inspection.

So getting back to your original question, yes it sounds like you need to work with someone who has practical experience in all types of sales, distressed, reo, short sales etc. At the very least the advice you appear to be getting is not helpful.

As UCGAL wrote a good percentage of the present and future inventory will be distressed. Short sales are frustrating but they do close and if you have patience they provide opportunity. Honestly in this day and age, to get a home at a serious discount, presume something is wrong with it and work will need to be done. If that is the case it may be more challenging to get THAT home with an FHA loan.

There should be no excuses not to look at all types of homes. Cumbersome or not the process is not that hard. You as a buyer should expect to know AHEAD of time what to expect and how the process will roll out regardless of whether it is a short sale or an reo or even a standard sale. You should also be explained the EFFECTS that your financing decisions will have on your real estate transaction….ie will it help or hurt my odds of getting a place in a competitive situation.

It doesn’t sound like you are getting that.

[SD Realtor]

In my opinion you are getting poor advice.

First off, if you plan to buy a foreclosed home using an FHA loan, you will have to be quite competitive when it comes to price. Second off, if you have been reading the posts here, with the way inventory is now, getting a home 10 to 15% off the listing price is not happening. Ask whoever is giving you this advice to pull up closed sales in the area of town you are looking at and give you the difference between list price and closed price. I think you will see that in no way does the actual fact bear out what you are being told. Third thing, when you get an FHA loan your home will be appraised by an FHA appraiser. There may be facets of the home that the FHA appraiser will want to have repaired, that the REO lender will not want to fix. Thus any home that is a serious fixer, that may be priced at a discount, may very well not pass an FHA appraisers inspection.

So getting back to your original question, yes it sounds like you need to work with someone who has practical experience in all types of sales, distressed, reo, short sales etc. At the very least the advice you appear to be getting is not helpful.

As UCGAL wrote a good percentage of the present and future inventory will be distressed. Short sales are frustrating but they do close and if you have patience they provide opportunity. Honestly in this day and age, to get a home at a serious discount, presume something is wrong with it and work will need to be done. If that is the case it may be more challenging to get THAT home with an FHA loan.

There should be no excuses not to look at all types of homes. Cumbersome or not the process is not that hard. You as a buyer should expect to know AHEAD of time what to expect and how the process will roll out regardless of whether it is a short sale or an reo or even a standard sale. You should also be explained the EFFECTS that your financing decisions will have on your real estate transaction….ie will it help or hurt my odds of getting a place in a competitive situation.

It doesn’t sound like you are getting that.

[SD Realtor]

In my opinion you are getting poor advice.

First off, if you plan to buy a foreclosed home using an FHA loan, you will have to be quite competitive when it comes to price. Second off, if you have been reading the posts here, with the way inventory is now, getting a home 10 to 15% off the listing price is not happening. Ask whoever is giving you this advice to pull up closed sales in the area of town you are looking at and give you the difference between list price and closed price. I think you will see that in no way does the actual fact bear out what you are being told. Third thing, when you get an FHA loan your home will be appraised by an FHA appraiser. There may be facets of the home that the FHA appraiser will want to have repaired, that the REO lender will not want to fix. Thus any home that is a serious fixer, that may be priced at a discount, may very well not pass an FHA appraisers inspection.

So getting back to your original question, yes it sounds like you need to work with someone who has practical experience in all types of sales, distressed, reo, short sales etc. At the very least the advice you appear to be getting is not helpful.

As UCGAL wrote a good percentage of the present and future inventory will be distressed. Short sales are frustrating but they do close and if you have patience they provide opportunity. Honestly in this day and age, to get a home at a serious discount, presume something is wrong with it and work will need to be done. If that is the case it may be more challenging to get THAT home with an FHA loan.

There should be no excuses not to look at all types of homes. Cumbersome or not the process is not that hard. You as a buyer should expect to know AHEAD of time what to expect and how the process will roll out regardless of whether it is a short sale or an reo or even a standard sale. You should also be explained the EFFECTS that your financing decisions will have on your real estate transaction….ie will it help or hurt my odds of getting a place in a competitive situation.

It doesn’t sound like you are getting that.

[SD Realtor]

In my opinion you are getting poor advice.

First off, if you plan to buy a foreclosed home using an FHA loan, you will have to be quite competitive when it comes to price. Second off, if you have been reading the posts here, with the way inventory is now, getting a home 10 to 15% off the listing price is not happening. Ask whoever is giving you this advice to pull up closed sales in the area of town you are looking at and give you the difference between list price and closed price. I think you will see that in no way does the actual fact bear out what you are being told. Third thing, when you get an FHA loan your home will be appraised by an FHA appraiser. There may be facets of the home that the FHA appraiser will want to have repaired, that the REO lender will not want to fix. Thus any home that is a serious fixer, that may be priced at a discount, may very well not pass an FHA appraisers inspection.

So getting back to your original question, yes it sounds like you need to work with someone who has practical experience in all types of sales, distressed, reo, short sales etc. At the very least the advice you appear to be getting is not helpful.

As UCGAL wrote a good percentage of the present and future inventory will be distressed. Short sales are frustrating but they do close and if you have patience they provide opportunity. Honestly in this day and age, to get a home at a serious discount, presume something is wrong with it and work will need to be done. If that is the case it may be more challenging to get THAT home with an FHA loan.

There should be no excuses not to look at all types of homes. Cumbersome or not the process is not that hard. You as a buyer should expect to know AHEAD of time what to expect and how the process will roll out regardless of whether it is a short sale or an reo or even a standard sale. You should also be explained the EFFECTS that your financing decisions will have on your real estate transaction….ie will it help or hurt my odds of getting a place in a competitive situation.

It doesn’t sound like you are getting that.

[NotCranky]

I agree with the disservice issue on a couple of fronts.

The good short sale listing agents stepped up to the plate and did some of the heavy lifting in this bust. To me it is unconscionable for a selling agent not to work with them out of professional respect.

The others spoke to the disservice to the buyer so no sense in repeating it.

[NotCranky]

I agree with the disservice issue on a couple of fronts.

The good short sale listing agents stepped up to the plate and did some of the heavy lifting in this bust. To me it is unconscionable for a selling agent not to work with them out of professional respect.

The others spoke to the disservice to the buyer so no sense in repeating it.

[NotCranky]

I agree with the disservice issue on a couple of fronts.

The good short sale listing agents stepped up to the plate and did some of the heavy lifting in this bust. To me it is unconscionable for a selling agent not to work with them out of professional respect.

The others spoke to the disservice to the buyer so no sense in repeating it.

[NotCranky]

I agree with the disservice issue on a couple of fronts.

The good short sale listing agents stepped up to the plate and did some of the heavy lifting in this bust. To me it is unconscionable for a selling agent not to work with them out of professional respect.

The others spoke to the disservice to the buyer so no sense in repeating it.

[Author]

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