Maribel Hill

Hello. This short commentary is for anyone looking to buy foreclosures in the current real estate market. As you know, foreclosures are at an all time high these days. The #1 Foreclosure city in the country is Cedar Hill, Texas, a south Dallas suburb. Are there deals to be had out there? Absolutely. However, the process by which you purchase these foreclosures is much more complicated than it was...say 5 years ago. As a potential buyer or investor, you need to be aware and prepared prior to making any offer.

First of all, offers are taking longer than the typical 30-45 days to close. Banks(the sellers in this case) are so swamped with foreclosures that it sometimes takes weeks just to get an answer. Know going in that you are not dealing with a typical seller, per se. You are dealing with banking institutions that are overloaded with mass paperwork. The key here is to be patient. There is no quick way of purchasing a foreclosure, unless you are an all cash buyer which means you have the money sitting in your checking account ready to write a check at closing.

Secondly, the banks who own these foreclosures are not as willing to work with Pre-approved buyers as before. For most banks, you must have a Credit Approval letter attached with any contract offer. This letter from your mortgage letter states that your assets, credit, and funds have already been verified. Why do they want this? Because too many times contracts have fallen apart at the closing table and banks are tired of this. I suggest that you get at least the following to your mortgage company as soon as possible so they can begin the credit approval process:

· Last 2 years tax returns

· Last 3 months bank statements, checking/savings

· Last 30 days paystubs

This may be a hassle up front, but many banks (sellers) are requiring this. Get a jump start and get it done so that when the right property comes along for you, you can offer on it. And this brings me to my third point.

Putting together a contract offer for many bank foreclosures are done in a backwards fashion. Many banks (sellers) want you to perform your inspection and appraisal prior to writing up a sales contract. They want you to know all the problems with the property, and they want you to figure out if your lender can loan on the property. The home will be sold as-is, in most cases. And the property must pass with an acceptable appraisal, otherwise your lender will kill the loan. So, be prepared to shell out funds for both items up front. Usually the banks (sellers) will give you a certain number of days via a verbal contract agreement to get your inspections done. Work hard to get all the info you need on your new home prior to writing the offer, because once you write the contract, your earnest money will be non-refundable, in most cases. Banks (sellers) do not care where your money comes from to close, so many times your contracts will not be contingent upon financing. How do banks (sellers) get around this? Through their many addendums which are attached and these addendums tend to override the actual contract terms within our TREC promulgated contracts. And this, of course, is going to bring me to my final and most important point.

Do not attempt to do this all by yourself.

Please, find a Realtor® who is knowledgeable in this field. Understand that as a Home Buyer, this service is FREE to you. Commissions are discussed and arranged before the property hits the market. This means that if you use the real estate agent who has the property listed, they get all the commission and you get no representation. The listing agent only works for the seller, not you. Many folks think they will get a better DEAL if they go direct. What they get is no one fighting for their side! So use a Realtor®... find a seasoned one who specializes in foreclosures or short sales. Realtors® are trained in their profession. And it's FREE to you.

Here are my two cents worth. As you know a blog is personal opinion. This is what I have experienced. I hope it helps point you in the right direction in today's Dallas real estate foreclosure market.

Make it a great day,

Maribel

mh@maribelhill.com

(800) 358-9093 x 2