While every home purchase requires due diligence on the part of buyers, buying a distressed property - a foreclosure or Short Sale - raises that requirement to a much higher level, Joe Tripoli says.
In addition to the usual precautions a buyer should take - such as becoming familiar with the area, looking into neighborhood schools and transportation, having the property inspected and feeling comfortable in the home - additional factors come into play with a distressed property.
First, Tripoli says, you must be certain there are no problems with the title. "Make sure you're getting a clear title," Tripoli says. "This hasn't necessarily been taken care of in a foreclosure. Together with your real estate agent, you should thoroughly study the title documentation to make sure there are no easement issues and all liens have been released. If you have any questions at all, talk to the person who did the title research to make sure you're not going to have unpleasant surprises down the road." However the foreclosed house ends up in a buyer's hands, issues that lurk in the property's past could cloud the title, and possibly cast uncertainty on the buyer's ownership rights. Title insurance protects against such defects in the title, such as undiscovered liens, forged signatures or defects in documentation. One important aspect of foreclosure purchasing care is to understand that
there are two types of title policies. Lenders policies protect lenders, and owners policies protect owners. A mortgage lender always requires a lender's title policy.
The main advantage to buying a distressed property is price. Traditionally, buyers have been able to get good deals, especially on bank-owned properties. And this can still be the case, though lenders have become less willing to accept extremely low offers. But sometimes a low price can come with hidden costs - in the form of repairs and maintenance that may have been delayed.
"You may be getting a better price," Tripoli says, "but what if you have to replace the sprinkler system or perform major repairs?"
That leads to the necessity of having the property inspected. A foreclosure may have been vacant for many months, and may have gone through a winter with the utilities turned off. Broken pipes, a leaky roof and other potentially costly problems are a real possibility. "You may need more than one inspection: a regular property inspection and one by an engineer," Tripoli says. "Make sure the utilities are turned on during the inspection. You need to be incredibly well-informed as to the property's condition, because 99 percent of the time the banks sell the property as-is. And they're very serious about that."
Another virtue buyers should have, Tripoli says, is patience, especially with a Short Sale. "Patience probably needs to be item No. 1," he says. "You're trading frustration for a little better price. "Don't limit your home search, Tripoli says. "What you need to do is get in touch with a real estate agent who'll make sure you see everything that matches your interests," he says.
Maybe you have heard talk about the "robo-signing" scandal, and are unsure what it is. To summarize, it was a scheme in which banks and law firms cut corners on foreclosure paperwork, causing some lenders to suspend foreclosures while they reviewed their procedures. Today, an agreement has been reached to help stop foreclosures, and many humanizers are receiving compensation. Jenna Thuening, a Certified Distressed Property Expert, is passionate to offer foreclosure purchasing care to families facing losing their homes. Many are wondering what would happen to the buyer of a foreclosed house if the home previously had been wrongly repossessed?
As long as the new lender and new owner have title insurance, the former owner can't gain the home back. Foreclosures offer buyers the chance to move into higher-priced neighborhoods that they otherwise probably couldn't afford. A house in a neighborhood of $300,000 homes might go on the market for $250,000 when it is sold as a foreclosure - or less. Engage Jenna Thuening's strong experience and thorough industry knowledge to guide your foreclosure purchasing care through the entire process.
The advice offered here comes from sales associates affiliated with independently owned and operated RE/MAX real estate offices and may not be applicable to all areas. Contact an independent RE/MAX agent near you for expertise tailored to your locale.
Certified Distressed Property Experts (CDPE) can help bring extraordinary results. Jenna Thuening respects and understands your circumstances and can help you find your best options when facing a foreclosure or short sale.
At the moment, the many foreclosures mean that in the majority+ of the country, it's a buyer's market, including the Twin Cities. That means that more houses are for sale, stretches on the market are longer, and prices have bottomed, plateaued or, in some places, increased.
Follow Jenna Thuening's to for your foreclosure purchasing care opportunities; you have more choices than you may be aware of. We offer current economy and foreclosure local news updated regularly by Home Destination.
Lenders policies protect lenders, and 
owners policies protect owners. A mortgage lender always requires a lender's title policy. 
