The Ins & Outs of Buying a Bank-Owned, Foreclosure, or Short Sale Property in Orlando, FL, from Another State, Another Country, or Another Continent

Live out-of-state or in another country? Have the financial ability but don’t have the luxury to visit Florida every time there’s a buying opportunity?

If you have access to a phone, a fax, an e-mail inbox, and air-express delivery service, you can do everything from the comfort of your desk chair. Not only will you be able to search for real estate opportunities, you can tour properties cyber-electronically, obtain a loan, make an offer, finalize a contract, close on the property, and manage it long-distance.

Here’s how —

Determine the ideal community where you wish to purchase

First find a Licensed Florida Real Estate Agent (like me!) who understands the ins & outs of web technology, can steer you to solid communities and subdivisions in the Orlando area, and is willing to form a long-distance business relationship with you.

Automatically receive up-to-date listings in your e-mail inbox

As your agent, I can send listings of available homes right into your e-mail box on an automatic and instantaneous basis. Most listings include interior and exterior photos, and many also include virtual tours.

‘Tour’ available homes long distance

If you become interested in a particular property and want a more personal and up-close assessment of its features, I can personally tour the property on your behalf, snap additional photos, and report back to you on the pluses and minus.

When you’re ready to buy

All you have to do is count to 3 —

1. Make an offer to purchase
2. Provide proof of financial ability
3. Put down an earnest money deposit

Item 1. As your agent, I will put together the appropriate paperwork and e-mail the contract package right into your e-mail inbox.

Item 2. After signing everything, you can either fax the paperwork back or send the documents via air-express delivery. At the same time, you will have to provide proof of financial ability by either making copies of your bank statements or providing a pre-approval letter from a mortgage lender. If you need to make arrangements for a loan, I can guide you to mortgage lenders who can approve you over the phone and e-mail a loan package directly to you.

Item 3. You will also have to show your serious intent to follow through with the purchase by wiring a deposit to the title company/closing agent. All monies are held in escrow. Should the contract not be accepted, your deposit is fully refundable.

Wait for approval of the lender or other third parties who hold liens against the property

If the property isn’t already owned outright by the bank through a court-ordered foreclosure proceeding, the contract must be approved by the Loss Mitigation Department of the mortgage lender and other third parties. Their decisions on whether to accept the contract is usually based on a Broker Price Opinion (BPO) or appraisal, the homeowner’s financial circumstances, the market conditions of the area, and the strength of the contract. Since the lender and other third parties must forgive a substantial portion of the homeowner’s indebtedness, a decision can take anywhere from days to weeks to months. A good agent, however, won’t let you wait around too long. She does this by placing a time-limit contingency on the contract. Just remember this: When going after short sale properties, patience and persistence is always the key.

Arrange for home inspections

Since the seller can’t make any warranties on the condition of the property, the buyer must arrange for home inspections that will reveal potential problems and necessary repairs.

A home inspector will examine everything from roof, attic, and doors, to electrical and plumbing, and everything in between. The buyer will receive a formal report and supporting photos.

In addition to an overall home inspection, it may be wise to also have specialized inspections conducted for wood-destroying organisms (termites), mold, water well, radon, or septic systems.

Many agents recommend you conduct home inspections BEFORE the lender approves the contract. However, this involves substantial expenditures—at a minimum $300-$400 and at a maximum $1,000—for a purchase that may not be approved by the lender. If your contract is worded properly, however, you can wait until the lender provides a written confirmation of its approval before going ahead with inspections. If the inspection finds substantial repairs or other problems, or even if the buyer decides the house isn’t right, the buyer can back out of the contract without harm and receive all deposits back without further obligation.

Your agent can work with you to make arrangements for inspections and can be present when the inspections are conducted.

Obtain a homeowners/hazard insurance policy

If a buyer finances the purchase with a mortgage loan, the lender requires the owner to take out a homeowner’s insurance policy, which will insure against loss. Even if the house is purchased with cash, it’s prudent for the homeowner to purchase insurance against loss in case of fire, windstorms, or liability.

Close on the property

The title company or closing agent will conduct a title search and issue a title insurance policy that guaranties the buyer is acquiring title of the property free and clear of any encumbrances or liens.

When it’s time to close, the title company or closing agent will prepare closing documents for all parties concerned. Again, e-mail, fax, or air-express delivery options can be used. Some of the documents may require a notarized signature. Once the documents have been signed and returned, and the balance of funds owed has been wired, the transaction is final and the purchase is complete.

Make arrangements for property management services

An investor who intends to rent out the property needs the services of a property management company. Such companies find credit-worthy renters, collect rents, make necessary payments for assessments, fees and expenses, and watch over the property.

Even homeowners who intend to occupy the house as a vacation or second-home getaway would do well to hire a property management company. Property managers will check on the house from time to time and alert the homeowner as to any problems, damage, or needed repairs.