| Earlier this year the pre-foreclosure and REO | | | | and sign a buyer's representation contract. Then |
| homes I was showing as a REALTOR® were | | | | that REALTOR® is working for you! |
| overpriced and trashed. In most situations buyers | | | | - Be Prepared to Sign Away Rights to a |
| were better negotiating with a traditional seller for | | | | Disclosure. Many states require that the seller of a |
| their first homes and leave the heavily damaged | | | | home disclose all known defects to the property. |
| and risky home bank-owned homes to the | | | | Most banks will require you to sign a waiver to a |
| investor with money to burn. But, as they say, | | | | homeowner's disclosure since as the bank |
| that was then and this is now. NOW, it is time to | | | | representative did not live at the home. |
| take a serious look at foreclosure properties. | | | | - Inspections are Critical. Buying a foreclosed |
| In the past few weeks, I had the opportunity to | | | | home means buying a home in AS-IS condition. |
| visit several dozen bank owned properties | | | | That means the bank will not warranty that |
| throughout the area where I work in Anoka | | | | anything in the home is working and will not make |
| County, Minnesota. Though several were in less | | | | repairs to any part of the home. A complete |
| than desirable condition, my first time | | | | home inspection is designed to give you a picture |
| homebuyers and I were pleasantly surprised | | | | of the current condition of the property and if |
| many in move-in condition. Better condition takes | | | | any major repairs will be required to make the |
| much of the fear of buying an AS-IS property | | | | home habitable. |
| away. | | | | - Rethink a Home Warranty. Spending the |
| So what do you need to know if considering | | | | additional few hundred dollars on a home |
| purchasing a foreclosed home? Here are a few | | | | warranty at the time of purchase could be |
| key points to consider.... | | | | money well spent when buying a foreclosure. If |
| - Understand the difference between short sale | | | | something was overlooked, not visible or apparent |
| and REO. A short sale or pre-foreclosure is a | | | | at the inspection, a home warranty might cover a |
| home where the seller is selling but owes more to | | | | repair of the defect. |
| the bank than the home is worth. A REO | | | | - Understand your Financing. Many foreclosed |
| property has been returned to the bank and is | | | | homes will not be in optimal condition to qualify for |
| now bank-owned. | | | | an FHA or VA loan. Before putting in an offer on |
| - Get Representation. Dealing directly with the | | | | a foreclosure, make certain that your financing will |
| bank is extremely risky. If you are going to be | | | | be acceptable to the bank. |
| looking at foreclosures, find an agent you trust | | | | |