What’s the catch to buying a Foreclosure?

If you’re a first time buyer, buying a home already seems a bit more complicated than just renting since there’s new steps, so unless you understand how simple it is to buy a Foreclosure, you’d probably feel it’s a bit over your head.

The basic definition of a Foreclosure is a property that has been repossessed by a bank because the homeowner defaulted or stopped making the house payments. The banks don’t make any money off of those properties once they are repossessed, so they need to sell them to a new homeowner as soon as possible.  That means a lower than market price home for a prospective buyer.

Due to the increased number of Foreclosures, most of them are listed through a Real Estate agent and you don’t have to go through a live auction.  A good way to get started is to get a list from your Real Estate Agent that specializes in these types of homes.

Click here for a Free List of Foreclosures In Your Area.

So what are some of the drawbacks? One is that if the property has been on the market for a long time, it usually sits empty without any utilities or maintenance at all during that time.  A bank doesn’t really care too much about the condition of the home since that’s not their business in the first place. This may require a bit of cosmetic repairs or small projects from the new homeowners.

A common concern is any past title defects or liens on the property from the previous owners, etc. since the home obviously had some issues for it to end up being Foreclosed on.  Well that’s what Title Insurance is for.  Your real estate agent should make sure you get an Owners policy which protects the new you against defects in the title, undisclosed liens, forged signatures, or defects in the documentation.

If you’re interested in buying a home that’s below market price where you will most likely make a bit of money by selling it in a couple of years, then a Foreclosure is a good idea for you.  You’ll limit a lot of your options, but you’ll get a great deal!

Let me know if you have any questions.

Tony Elias  


How to Choose the Right Realtor for YOU!

Many prospective home buyers start off by using Trulia and Zillow until they find a home they really like. At that point, they realize they need a Realtor to get into the home. Well do you simply call the listing agent for the particular home you’re interested in or do you try to find a good Real Estate agent to represent YOU, the buyer?

There are two agents for each real estate transaction. One representing the prospective buyers and one representing the owners of the home they are trying to sell, the Buyer and Listing agents. In the State of Texas, the agent representing the prospective buyers gets paid by the Seller’s commission. That means essentially that it is a free service to the buyer. This doesn’t mean that as a buyer, you should simply go with the first agent that comes along to open up the door to a house you liked. That is by no means a good qualification for you to hire someone on one of the most important decisions of your life.

Don’t get me wrong, many times you’ll find great Realtors to work with that way, but I still believe that you should try to find someone that understands your situation and personality and who is knowledgeable enough to be help you effectively. Take some time to meet different agents and make a decision to stick with the one that you feel works best with you.

Once you have a buyer’s agent working with you, he/she will help you:

  1. Get Pre-Qualified for a Mortgage Loan and determine how much of a home you can afford.
  2. Find and show you the home you like best.
  3. Submit an offer and negotiate for you.
  4. Ensure the home gets an Inspection and any repairs needed in a timely manner.
  5. Renegotiate as needed should any surprises arise.
  6. Ensure the mortgage loan comes to fruition on time.
  7. Schedules the closing.
So as you can tell, you’ll be spending a lot of time and money with your new friend. Don’t just jump on the first one that comes along. Take a bit of your time and find the right one for YOU!

Tony Elias – 512.351.0823

Click here for a FREE list of Foreclosures and Fixer Uppers