What you need to know about foreclosures

"Every now and then, I get a call from a client that has found a new web site with a foreclosure they are interested in and an mls number I am not familiar with. When I track it down the house is often "in foreclosure" which means it is going through the process and not available to purchase, unless of courae, the buyer has cash and wants to try his luck at the courthouse steps. Keep in mind, when you go the the courthouse steps to buy a foreclosure, a representative from the bank holding the loan on the property is also there to bid on it. Most of the time they try to buy the house for at least enough money to cover the loan they have on it. So if you are the winning bidder then you probably bought the property for more than the bank thought it was worth!

Some really savvy people have made good buys on the courthouse steps. Or at least they think they have. Those properties were not displayed in the real estate market. The real estate market acts as a rank and file system where property values trickle down to a place where they sell. You can compare them to property more or less expensive and know what you are buying. At the courthouse steps you are in an auction atmosphere and you have a few minutes to buy or pass on a property. You also buy it with all of its liens and unpaid taxes.

That is how a property changes hands from an individual to a bank. There are lots of paperwork, deed issues and research that needs to be done before the property is turned over to an asset manager and then to a real estate company to sell. A property can go in and out of the foreclosure process many times. For instance the owner may stop the foreclosure process by getting an offer on their house. If that offer is less than the payoff it is known as a short sale.

The important things to remember are these:

The MLS on this site is the best source for property in the Athens area. Athens has its own MLS system and local realtors put their listings in it first including foreclosures and short sales. But the important thing is that the best deal may not be a foreclosure or short sale. Every person selling a home now has to compete with foreclosures and short sales. Study the market and learn to recognize value.

Get qualified. An offer made on a short sale or foreclosure has to be presented with an approval letter or it will not even be considered. If you are a cash buyer let the bank know you are looking at foreclosed property so they are prepared to send the letter out at your request.

Are you interested in a fixer-upper. Well be prepared. A lot of foreclosures are just that. People with financial problems may have struggled for a while and they were not keeping their homes up. Some are mad at the world and just do damage to the house before they move out. Often they take things of value like appliances, light fixtures and even copper. You need to consider the cost of fixing the house when you compare it to other houses for sale. For homes that need work, there are programs in place to take care of the improvements as a part of the loan package.

Respond quickly to requests from the asset manager handling the foreclosure. They will take their time responding to you but will move on quickly if you don't get back to them in a timely manner. Really, they don’t play fair. They may drag their feet making decisions and are tapping their feet waiting for you to respond.

Stay on schedule. You will have a short period of time to inspect the house and make decisions regarding the outcome of the inspection. Not meeting deadlines could cost you your earnest money.

There are a lot of issues that come up dealing with foreclosures and it happens fast. It is a good idea to get a realtor to help you find a foreclosure and make sure you get to the closing successfully. It won't cost you anything and could save you money. An agent looking after your interests can research past comparable's, help you stay on schedule, help price repairs and give you an experienced person to bounce ideas off of.

"Most of the homes I have sold lately happened because we made the offer within the first or second day it appeared on the market. There are a lot of people looking for the same thing that you are and good deals go under contract quickly. That is why I search several times a day for new listings and price changes. You don't have to use me, but find someone to represent you. Why not? It does not cost you. See How Real Estate Works?"

Mark Arnold

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