Five Questions Foreclosure Buyers Should Ask

1. What's the first step?

Find licensed REALTOR® and get pre-approved for a mortgage. If the purchase will be a secondary or investment property, know that financing may be more difficult than a primary residence due to the fact that lenders typically charge higher interest rates and require a larger down payment.

2. How can you tell a good foreclosure from a bad foreclosure?

Again, find a licensed REALTOR®. Buyers need to be aware of any unpaid liens such as mortgage debt, home equity lines of credit, taxes and outstanding construction loans. Hint: Search for REO (Real Estate Owned) or Bank Owned Properties.

3. Can a Buyer appeal to a Bank for better loan terms on a REO Property?

If the Buyer has outstanding credit, this may be an option.

4. What are the costs associated with buying a Foreclosure?

Sales commissions, marketing costs, vacancies, taxes, insurance and maintenance costs can all be part of the costs. Add a 10-15% "No Surprises Fund" to the price of buying a foreclosure so that if anything unexpected arises, you are prepared.

5. Neighborhoods and Foreclosures

Avoid neighborhoods overrun with foreclosures. Look for good rated schools and established neighborhoods.

Please give me a call at 719-492-2439 or send me an email to johnnyj@topproducer.com if you would like to talk further about foreclosures.