So you want to buy a foreclosure.
Almost everyone who comes to me looking for a home asks about foreclosures. They want the American Dream for cheap and there is nothing wrong with this but most that take this approach spend more for a home than Market Value by the time they are finished. Buying a foreclosure can be an excellent way to get houses apartments lands, houses homes, Real Estate, but you will need to know one thing- IT IS HARD WORK and then IT IS MORE HARD WORK. The up-front costs and Interest rates are higher, but with a little common sense and hard work you can come out of the process with equity.
Remember Banks do not want to foreclose on people, it generates RMAs, which reflect on the lender and reduces their borrowing power and lending requirements. They will work with people in order not to foreclose. ( I had one client that it took almost a year to sell the property, because we contacted the bank diligently, and updated them, they stalled the foreclosure.) This allowed us to get the property sold in a bad market period.
Almost all foreclosures fall into disrepair because of lack of maintenance or outright vandalism. People do not like it when they lose their properties they often take it out on the home justifying their actions. Foreclosures sit for long periods of time while lawyers shuffle paperwork.
If you do not have the money to make the repairs, you will have to finance them. Construction and 203k loans always cost more at the settlement through points and interest rates. Inspectors and consultants will have to be hired to create reports and guidelines. These will be needed for the contractors bid submission reports to the lender. All of these fees will have to be paid up front.
Then there is the contractor, a person you will be married to for a long period, whom you will have a love hate relationship. It does not matter how good the contractor is, it is a long difficult process and at some point in time nerves will be frayed. Things will be delayed and costs will increase because of unseen problems linked to working on older homes.
But in the end with a little savvy, finesse, and diligence you can create a home, to your specifications, and possibly create a little equity or profit for yourself.
I have advantage over other realtors in this in that I used to be a general contractor before I was a realtor. I have created with my own hands and have lived the entire process many many times. It is hard but the American Dream is not easy and those that achieve this self actualization realize the happiness that this can bring.
Below are links to listings for foreclosures, I will be contacting lenders that I have worked with who specialize in this process and adding there links below. Check back occasionally for updates of resources.
John Norton Realty Executives of DC
Washington DC Homes for Sale
Maryland Homes for Sale
Virginia Homes for Sale
As the interest in buying Maryland, Virginia and Washington DC Foreclosures increases, more and more people are wishing to purchase one of these more initially lower-priced options. Initially is the key word, as many of the properties require significant repairs and renovations before they are habitable. In fact, many buyers end up paying more for their Maryland, Washington DC and Virginia Homes than the property’s Market Value. This is due to the home’s initial purchase price combined with the cost of repairs and renovations; which in some cases can cost more than purchasing a well-kept, non-foreclosed home.
Understand What You Are Buying
Because most foreclosed properties are bank owned, they are sold “As-Is,” with the right to inspect. This means prospective buyers may encounter homes with unkempt yards, and interiors and exteriors in various states of disrepair; including homes that have been vandalized. In fact, some homes’ previous owners are so angry they are losing their properties, they take it out on the home; resulting in significant costs for the new homeowner.
If financing Virginia Real Estate Foreclosures, Washington DC REO homes or Maryland Property Foreclosures, be prepared to receive a loan with higher interest rates than if purchasing traditional Maryland, Virginia or Washington DC Real Estate. Similarly, if needing a loan to make the property habitable, construction and 203K loans are available; however, these types of loans cost more at closing due to the loan’s points and interest rates. Depending on the property’s condition, other fees associated with Virginia, Washington DC and Maryland Foreclosure Homes can include:
-Fees for Inspectors and Consultants to Inspect Properties and Create Reports
-Bid Submission Reports will need to be Prepared and Submitted to Lenders
-Other Types of Property Inspections Requiring Up-Front Fees
Have a Contractor in Your Corner
Most people purchasing foreclosed Maryland Real Estate, Washington DC bank homes or Virginia Property Foreclosures will require the services of a contractor. As a former General Contractor, I can help answer any questions a buyer may have. Understanding the entire home construction process, if choosing to use the services of a contractor; homeowners will definitely experience and be inconvenienced by construction noise, construction dust and debris, construction delays, unexpected costs, and hidden/unforeseen problems.
If willing to put up with all of the hassles construction brings, homebuyers can own a remodeled home with positive equity. Take the first step and allow me, John Norton, to assist you with the home buying process. I look forward to working with you and helping you achieve the American Dream.
Virginia Property Foreclosures | Maryland HomeFinder | VA Townhouses | MD Property Foreclosures | Maryland Townhouses | Virginia HomeFinder