Foreclosures In Winston Salem NC and How to Buy HUD Foreclosure Real Estate
Foreclosure homes in Winston Salem are a good deal when they can be purchased in such a way as to realize built-in equity "at the closing" table. Everyone knows that having equity in one's home means that your financial statment reflects that equity, thus providing greater net worth! This can apply to the First Time Homebuyer as well a someone looking for a great rental property, a second home, or your primary residence.
There are literally hundreds of web sites that claim to have current lists of foreclosure homes for sale all over the country. Most of those sites have outdated information and require a fee to join. One site that will usually NOT have out of date listings and is FREE to use is HUD... short for the "U.S. Department of Housing and Urban Development". And one of the largest property managers for HUD is HMBi, which stands for HARRINGTON, MORAN, AND BARKSDALE, INC. Based out of Texas, they represent several states, including North Carolina, with foreclosures listed with HUD. For foreclosures in Winston Salem, NC, we are, therefore, interested in the HUD listings for our area. Their web site for our area is www.hmbiweb.com/listings.html. Once there, click on the map for North Carolina to begin your search for homes. Now that we have that much information to go on, let's find out "How to purchase HUD foreclosure real estate."
All properties with HUD are "up for bid". HUD leaves the foreclosed property open at first to only those buyers who plan to occupy the property, once the sale is closed. After a stated period of time in the bid process, if the property has not gone under contract, then HUD will open it up to investors as well, since investors usually do not plan to occupy the home after the sale. At any case, you will need a HUD Approved Real Estate Broker/REALTOR® to represent you in the bidding process. Beware!! Once you have your agent to place the bid, if it is accepted, you should be ready, willing, and able to move forward towards the purchase. There will be time limits for all the steps involved, if your contract is accepted. Therefore it is critical that you have your financing in place PRIOR TO YOUR SEARCH for a foreclosure home to purchase.
Starting at the beginning, you must select a Certified HUD Broker/REALTOR®. The difference between a REALTOR® and a "real estate agent", is that all agents are not REALTORS.
For an agent to become a REALTOR®, he or she must periodically attend the REALTOR's Ethics Classes and pass the exam. Realtors are expected to live by a higher standard of ethics and trustworthiness. To become a Certified HUD Broker, each broker must go through a "standards and informational" process in order to qualify to represent the buyer in a HUD real estate purchase. Once that is completed, then they receive their acceptance letter and keys to all HUD properties in the area.
When applying for a loan for a HUD property, you must know up front if the foreclosure home in Winston Salem that will be selected, has a "Repair Escrow Account" established. Your REALTOR® will be able to find that out early in the process. You may be thinking, "Why should that be a big consideration?" The answer is that most lenders today will not close on a property that has a "Repair Escrow Account" in the mix. And, certain types of loans
will not work either, such as an FHA loan. So, decide to get "pre-approved," (not just pre-qualified) with a lender that will accept such a stipulation. Once you have your preapproval letter (and a copy for your REALTOR®), you can now begin to visit HUD foreclosures with confidence that when the right property is found, you will be able to move on it quickly and secure the BID!!
As you select homes to visit, consider those that have a much higher tax value than the list price shown on the HUD website. Starting with those and then working down the list to those where the tax value and the list price are getting closer and closer together with help you end up with more equity at closing. If all pieces fall together properly, ending up with the home that has the widest spread between the higher tax value and the lower list price, will serve you well in the long run. Of course the condition of the property, even with a wide spread, can determine if a bid is even a smart thing to do at all.
Next in the selection process of a foreclosure home in Winston Salem is to visit the properties with your REALTOR®. Examine every aspect carefully and with a check list to help you remember things when you get back home. Your REALTOR® may be versed in repair costs, however if you have a personal friend who is a building contractor or repairman, familiar with the trade labor and supply costs, that would be a big asset in determining rough estimates before bidding. Ask that person to tag along to the propety with you and your agent. Bring along a digital camera as well to help you document any damages found. Many foreclosures do have damage, either from disgruntled owners, vandalism, or from just being unoccupied for long periods of time. Most all HUD homes will have no electrical power on and plumbing shut off. A flashlight or two are handy to have.
Things that should be on your check list are:
1. Exterior Condition: Siding, Roof, all exterior doors, windows, chimney, appearance 
of foundations, proper gutter drainage, yards and trees, driveway condition, and roads leading to the home. If that road is gravel, the Lender will want to know who is responsible for keeping the road up.
2. Check for vandalism and make notes on the extent of damage. Use your camera especially here to help you document those areas that may be in obvious need of repairs.
3. Visual checks of heating and air conditioning and heating systems, electrical panel box, visual conditions in existing appliances, of water well pumps and tanks, and water heaters.
4. Visual water damage in all areas and especially in basements and crawl spaces, making notes of any moldy smells or evidence of long term dampness.
Your broker should be able to lend some help and suggestions from his or her experience. However, your NC Certified Inspector will be the expert in the inspection process, which will occur once you succeed in the bidding process.
Next, have your REALTOR® to perform a Comparative Market Analysis (CMA) on the property to determine what other similar properties in the area have sold for during the past few months, to determine what values to consider for the property in question.
Once all these items have been completed and you have decided what price to use for the bid, give your approval for the REALTOR® to place your BID!!
Foreclosure Homes in Winston Salem can be a real source of great equity up front for the new buyer if careful consideration is done upfront and all along the process.
Please email me at dpatterson1@triad.rr.com for further real estate information on this topic or others. Please visit my website at www.callDOUGnow.com to perform free MLS home searches for a great home, whether it is a foreclosure or a conventional purchase. I will be glad to help you with your real estate questions at any time.
Thanks and Look forward to your comments!
