Tips On Buying A Foreclosure As A Homeowner To Be
  1. First and foremost forget anything you may have heard about buying at the courthouse steps, this is a cash only sale so no financing and you get the home as is with the occupants in place. So good luck evicting them and remodeling after they trash the home. Also, the Trustee’s Sales as the courthouse sales are known are for professionals only, dozens of them get together there and they know exactly what they are buying, have detailed information about the home and occupants and are experts at paying the occupants to leave; you will be bidding against people who do this for a living and besides, these days the sales are being postponed endlessly by the lenders.

  2. Do not waste time signing up to the many REO/Foreclosure sites such as Realtytrac.com or Foreclosureradar.com. Their listings are inevitably old, sold or cold. Knowing a property reverted to the bank at the courthouse steps (which those 2 sites are good at telling you) is a far cry from knowing which real estate company is going to list the property for sale

  3. Save yourself a lot of time and don’t bother calling the banks direct as you will be in endless switchboard limbo and basically, they don’t know, they are swamped; if foreclosures up tenfold over the last 2 years, how many lenders do you think have hired 10 times the staff. Correct, none.

  4. A huge portfolio of REO is owned by the GSEs Freddie Mac and FannieMae they have an excellent web portal called Homesteps.com and each property that is listed has photos and a listing agent attached to it. The loan limits of the GSEs will limit the search in the Southern California market to mostly the poorer neighborhoods as more expensive properties did not until recently qualify for FHA financing.

  5. Pay very strict attention to the hidden costs often passed on to the new owner, liens, special assessments and taxes. Read the preliminary title report closely and ask questions. Ask a lot of questions and get detailed inspections to firmly grasp what you are buying. No one remodels a house or replaces the roof and plumbing just before they lose the house to the bank so be prepared to find deferred maintenance pretty much everywhere. Make sure to get a 9a report.

  6. Do not be afraid to renegotiate the price with the bank after inspections. You may be forced to do so anyway as the loan you will be getting requires an appraisal and the appraiser will likely call out any items that need attention on his report. Once the appraisal and Physical Inspection have been done get bids. Forward your bids and the appraisal along with the inspection (via your Realtor) to the bank and include the C.A.R. Request For Credit. If some items are severe enough your lender may require them repaired prior to funding your loan, in this case include any documentation to this effect from your lender.

  7. To find the best sources of foreclosure listings do a search in your area for agents that specialize in REOs and visit their websites. Banks also have their own websites, bankofamerica.com for example but the sites are huge and REO listings tough to find. Try under “Mortgages” often Buying a Home will include a tab of the banks own properties.

  8. The very best advice once you find a REO expert is to allow them to represent you in the transaction as your agent. In a multiple offer situation you will have the inside track even though all offers are presented and all parties treated equally, very often you will be treated more equally than the others.

  9. “This is an as is sale” and “you risk losing your deposit” are the 2 most over used and misunderstood phrases in real estate. REO sellers want to sell you the property and they do not want to risk litigation so they are happy to issue a credit if it is a valid reason (health and safety issues for example, or an appraisal issue) and no one in the state of California with more than a double digit IQ ever lost their deposit. Contractually there are valid reasons to cancel or extend and timelines for your contingencies, write them down and do not let them expire, remind your agent if you need to that an Extension of Time Request should be sent to the seller if necessary.