All About Foreclosed Properties
Benefits of Buying Foreclosed Properties
- ◉Relativtely lower price: Typically, a foreclosed home costs less than other homes in its neighborhood. Most of them are listed below the average market value of homes within the area since lenders tend to want to move them from their home inventory within a certain time span.
- ◉Loan configurations remain standard: While foreclosed home acquisition may have its own bidding and buying process, most standard loan configurations still apply granted that it's not a cash-only auction. Provided that the home is in a livable state, buyers have the option to go for either a conventional loan, FHA loan, USDA loan or VA loan. If the property is in an unfit state, government-backed loans may require home repairs.
Risks of Buying Foreclosed Properties
- ◉Increased maintenance concerns: Some homeowners have no incentive to maintain the home’s condition when they know they’re going to lose their property to foreclosure. If something breaks, the homeowner won’t spend money to fix it, and the problem could get worse over time. You’re responsible for fixing whatever problems the home may have when you buy a foreclosed home.
- ◉As-is sales: The lender’s main concern is recouping their money as quickly as possible, which means an as-is sale in almost every instance. You shouldn’t buy a foreclosed home if you don’t have a significant amount of cash to invest in repairs.
- ◉Squatter’s rights: A home might be legally foreclosed, but it doesn’t mean that no one is living on the property. Many foreclosed homes sit unoccupied for months or years at a time, which could attract squatters. If you buy a property with a squatter living in it, you need to legally evict them even if the person or people in question have no claim to the home. This can take months and cost thousands of dollars in attorney fees.
Our Foreclosed Property Acquisition Process
1. Explore Known Avenues
Short Sale, Auction, HUD
Our team will explore all known avenues to secure the home that meets your specifications. For foreclosed homes, we scour auctions, the HUD inventory and even properties on short sales. This tedious process is the minimum we give our clients who deserve nothing short of a 5-star experience.
We go over our lenders' inventories.
Palm Realty has wide network of lenders and has good relations with each of them. This professional network, which was built through trust with over two decades of successful deals, allows Palm Realty to get first dibs on lenders' real estate-owned (REO) inventory. Palm Realty leverages this privilege for its clients who are looking for foreclosed homes.
2. Lender REOs
We Process the Buyer for Pre-Approval
If the buyer opts for a mortgage loan, our team reviews the buyer's financial documentation for mortgage loan pre-approval; followed by our endorsement to our lenders for a pre-qualification offer.
Property Valuation and Inspection
WE will appraise the foreclosed property and let the buyer know how much money it's worth. A home inspection is a more in-depth look at a property. We will also have an expert inspector go over the home to take note of damages and repairs. Inspections are particularly important for foreclosed properties.
4. Inspection and Appraisal
Offer submission and Closing
If everything checks out after inspection, we will move to finalize the loan with our lenders and draw up the necessary documentation for closing. Palm Realty handles this ardous process as efficiently as possible while making sure to update the buyer at each junsction.
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