How to Buy a Foreclosed Home

ks14446There is a major sale going on in the housing market, and with real estate appraisals coming up with comparables that are lower than ever, it may be the perfect time to buy. One of the questions my real estate appraisers in Valley Village are getting is how to buy a foreclosed home. This is also a big issue for real estate appraisers in North Hollywood. Though there are a lot of bank-owned properties available these days, trying to buy one can be risky. With a conventional home purchase, you have all sorts of protections against being taken, but in a foreclosed deal, its buyer bewares. There are, however, steps you can take to protect yourself and get a great bargain. Keep in mind that one of the best ways to find out what a house is worth is by checking on the comparables of the surrounding neighborhood and what their home appraisals were valued at.

 

The first thing you want to look out for is if the website you are going through to find out how to buy a foreclosed home is charging a fee. There are free ways to find out about foreclosures in your area like calling local brokers, real estate appraisers and agents. Like I said, my real estate appraisers in Valley Village as well as my real estate appraisers in North Hollywood are constantly out in the field doing home appraisals, so they have some of the most up-to-date information. The same is true for real estate agents and brokers; and because they want more business, they are more willing than ever to dole out free advice and information.If that’s a concern, try to negotiate to have the utilities turned on for inspection before you close on the home. A home inspection usually runs from $250 to $400 and can save you a lot of money if something is wrong with the home’s structure or systems. You need to know what repairs you’re on the hook for to determine whether the price is fair. This is also where a home appraisal comes in, because they document all of these factors in their official real estate appraisals that get used to determine the value of the home.

 

 One important thing to keep in mind is the fact that if the property has been on the market for less than 30 days, lenders are usually looking for full-price offers. After 30 days they may be willing to accept a lower price. After 60 days you can offer even less. So this is basic economics and supply and demand. Logically, the general rule is the longer the house has been vacant, the lower the price will be. So, one of the best things you can do when you’re trying to figure out how to buy a foreclosed home is find out which homes in your area have been on the market the longest.

 

Once you’ve found a home you want to purchase, you’ll want to invest in a full home inspection. This is always a good idea when buying a home and my real estate appraisers in Valley Village along with the real estate appraisers in North Hollywood recommend this to all of our clients, but it is especially important when buying a foreclosed home. Vandals may have stripped fixtures and appliances. What’s more, the utilities have probably been shut off, making it impossible to gauge the shower pressure or test for leaky pipes.

 

If you are looking at how to buy a foreclosed home, you also want to beware of the fact that s0me states have a redemption period that lets the original homeowner satisfy his or her debt and take back the foreclosed home during a specified period after a foreclosure. This is especially true right now, with all the steps President Obama is taking to try and save homes from foreclosure. You’ll also need to be patient because banks may take 60 days or more to decide whether to accept your offer on a foreclosed home. These lenders are looking at things like your finances, the home appraisal of the house and other competing offers. In fact, one of my real estate appraisers in North Hollywood just saw one of our clients go through a bidding war on a foreclosed house in the area.

While the housing market is clearly a mess right now, there is an upside to it; the fact that homes haven’t been this affordable in years. That being said, you want to be smart about your purchase and learn everything you can about how to buy a foreclosed home such as what the home appraisals in the area are going for. Find yourself professional and trustworthy real estate appraisers, lenders and agents and get as much information as they are willing to offer. Once you have done all that and researched as much as possible, you’ll be ready to go out and find your dream home.

Help From Home Foreclosure is Finally Here

imagesWith President Obama’s foreclosure prevention program in place, home owners may now start to begin the process of saving their homes. This is especially good news for homeowners in the San Fernando Valley, where my real estate appraisers in Valley Village as well as real estate appraisers in North Hollywood have seen the price of homes drop dramatically over the past year. Keep in mind that one of the biggest components to a home appraisal is finding what the comparable prices of surrounding homes are selling for, and when you see foreclosure signs peppered throughout a neighborhood, everybody’s home value goes down. This is one of the reasons so many people are now seeing their homes underwater, which means they owe more than what the house is worth and this makes it very difficult to get a loan modification.

With the help of President Obama’s foreclosure prevention program, many homeowners may get a chance to apply for a loan modification, which will better suit their current economic condition. The plan, which is a multipronged fix, calls for companies to help as many 4 million struggling borrowers by modifying loans so monthly housing payments are no more than 31% of monthly gross income. Separately, homeowners who haven’t missed a payment can refinance into lower-cost loans even if they have little or no equity. This is expected to help up to 5 million homeowners. This will help stop the foreclosures that are steamrolling through cities and towns like the San Fernando Valley, and that in turn will help raise the value on a home appraisal.

The $75 billion foreclosure prevention plan will allow for loan modifications that will provide incentives to borrowers and loan servicers and investors to spur mortgage modifications, even if your home is underwater. The government will also subsidize interest rate reductions to get borrowers to affordable monthly payments. More than likely this will mean that you will need to reappraise your home to find out what it is currently worth, and for real estate appraisers in Valley Village as well as real estate appraisers in North Hollywood, this is most welcome news as their cities have been two of the hardest hit in the housing market crash.

“This plan will help make home ownership more affordable for nine million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans,” said Housing Secretary Shaun Donovan. This is more than just great news for homeowners, it’s great news for everybody because, as Mr. Donovan states, declining home prices have played a huge roll in the recession we find ourselves in. A rise in home appraisals is one of the signs that things are beginning to improve for everybody, not just people in jeopardy of losing their home, which is why President Obama’s foreclosure prevention plan is a huge part of the stimulus package and good for us all. This will also help raise the value of homes underwater, and bring prices to a reasonable level.

As of today, borrowers can start contacting their servicers to see whether they are eligible for assistance, and they may want to begin to look around for a professional to do their home appraisal so they know what their home is currently worth when they begin the loan modification process. Federal officials will promote the program at homeownership events nationwide, and real estate appraisers are getting up to speed on the new loan modification guidelines. I know, for example, that many real estate appraisers in Valley Village along with their counterparts, real estate appraisers in North Hollywood, are in constant contact with lenders so that they are all on the same page when their customers are ready to begin the process.

There are, however, eligibility criteria you need to meet. For example, the loan modification plan focuses on people who are behind in their payments or are at risk of default, which Federal officials clarified as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default. But if you fit into these categories, the foreclosure prevention plan may be the Godsend you need.

If you or anybody you know is thinking about applying for a loan modification and need help finding out what your home is worth, please visit our real estate appraisers in Valley Village and our real estate appraisers in North Hollywood at www.iappraiseforyou.com and we can help you get the fair market value of your home. You may also want to check out www.hud.gov for more information on who qualifies for President Obama’s foreclosure prevention plan.