WHAT TO EXPECT WHEN BUYING A FORECLOSURE

Buying foreclosure properties requires in-depth research, preparation, patience and persistence. Here are five things to keep in mind:

1. The Offer: When bidding on a foreclosure for sale, never forget that the people making the decisions have no financial interest in the deal. Therefore everything, from getting a response to close of escrow, will take TIME. Be prepared for a lengthy transaction and stay patient. Substantiate the offer price in writing and document your case. Most banks want to unload their foreclosed properties, but they do not usually accept really low offers-instead, they will gradually reduce the asking price until it sells.
    
2. Financing: You need to have pristine credit and/or plenty of cash. With good credit, many banks may loan again on the foreclosed houses. Foreclosure investors with a large amount of equity in another home may get a line of credit from their bank to purchase a foreclosure.
    
3. Title Search: Banks generally only give a Special Warranty Deed for foreclosures. Hire a title company to run a full, insured title search before closing the deal. Banks should clear the title before selling but never assume this is the case.
    
4. Inspect Property: Bank-owned foreclosure homes are usually sold "as is." Major repairs are often necessary since many homeowners who have been struggling financially have not kept up on their home maintenance. The bank usually will not pay for any repairs, so be prepared to do them yourselves. Much of the damage may not be immediately apparent in an exterior inspection, and since the discounted purchase price can easily be eaten up by expenses, it's important to hire a licensed home inspector to give you written repair estimates before you decide if the property is worth it.
    
5. Closing Date: Banks want a firm closing date of 30-45 days or less. If the escrow doesn't close by that date-even through no fault of the buyer-many banks will charge a per diem fee, usually $100.00 per day.

You'll feel much more confident when you have an experienced agent to help you buy a foreclosure. Contact an All Power agent to help you make the deal of a lifetime!

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