Edina Realty

Basic Information About How to Buy a Foreclosed Property

By Patti Katzmark

THIS IS THE BEST TIME TO BUY A PROPERTY IN ALL OF HISTORY!

Interest rates are historically low! Selection is at an all time high!

HOME OWNERSHIP IS NOW AND ALWAYS HAS BEEN, THE NUMBER ONE VEHICLE FOR BUILDING WEALTH FOR MOST PEOPLE

It is the American dream to own your own home!

When you purchase a property, a price point is established, you are making payments and maintaining the property, through the usual course of time, property values rise, thereby, creating equity! What we want to do is look for properties that have the potential to make the EQUITY in the property grow at a faster rate than just “time”.

I would like to share with you my views on the process. We will discuss the role of a realtor, the difference between a short sale and a foreclosure, the shopping process and the buying process.

THE ROLE OF A REALTOR

If you had a sore tooth, you would consult a professional, a dentist, to care for your teeth. If you were going through a divorce, you would consult a professional, a lawyer, to represent and protect you through the process. Home ownership is the one way most people to create wealth in their lifetime. Doesn’t it make sense to consult a professional to help you through the process of purchasing a property? A realtor is that professional.

In Wisconsin, by default, all realtors represent the sellers in a transaction! Let me say that again, by default, in the state of Wisconsin, all realtors in a transaction represent the seller, unless, there is a separate agreement, (called a buyers representation agreement) in which you, the buyer, have a realtor in the transaction represent you. This separate contractual agreement allows the realtor to negotiate on your behalf, give you advise and information, in general, work for you. Otherwise, when you call the realtor on the sign in front of the house, that realtor is representing the seller. Buyer beware! You want someone to represent you!

Realtors are responsible for all of the information you see on the search engines when you look for properties, the realtor has a separate contractual agreement with the sellers of the property that allows the realtor to represent the seller in transaction and allows the realtor to advertise the property for sale by putting it on the MLS. The MLS lets other web sites and search engines download the information so that you see about properties for sale. Realtors have information that you can not necessarily get on most search engines, like how many days the property has been on the market, and the original listing price. These things can be very helpful in making an offer and negotiating a purchase price.

This separate contractual agreement also sets out how the realtors in the transaction will be paid. In case you were unsure, realtors usually get paid by the seller.

THE DIFFERENCE BETWEEN A SHORT SALE AND A FORECLOSURE PROPERTY

(in simple terms)

A short sale

The owner is usually behind on their payments

The bank is willing to consider offers that are less than what is owed

The process of making an offer on and getting to the closing on short sale property is long. The process can be very long and the closing may not happen.

How it works is:

You want to make a purchase, you write an offer, the offer is submitted to the owners, the offer is negotiated with the owners of the property until it has reached an agreement, This agreement is subject to bank approval. Once the paperwork is agreed upon, it is sent on to the bank. It has a long road to go on there. The approval has to come from underwriters, consultants, everyone and their brother. Once the bank decides which terms they will accept, the write the terms and submit them back to the seller and the negotiation with the bank and the seller starts. If and that is a big IF, the bank and the seller come to terms, the offer will then come back to you to get your approval if any of the terms have changed.

Short sale does not refer to the time frame for the sale, it refers to the money short on the mortgage!

Foreclosure properties

The bank is the owner of the property, the property has been through the foreclosure process the bank has already lost thousands and thousands of dollars. That is what the press is talking about when they are saying you can get properties for pennies on the dollar, you literally can, the banks have already lost that much money. Once the banks have established a price on the listing, they pretty much stick close to that price for offers until the property has been on the market for a number of days then banks start reducing the price until a buyer is found. Which is what makes it difficult for most sellers, banks have the ability and the necessity to keep reducing the price until they find a buyer, most home owners do not and can not compete. The process is pretty simple although can be time consuming. Your realtor is usually negotiating with the other realtor and an asset manager. An asset manager is someone the bank has hired to help them with the procedure of getting the property sold. Once the offer is accepted you are on your way to closing.

THE SHOPPING PROCESS

You must remember there is stiff competition for properties in the under $100,000 price range, if you are shopping in the less than $50,000 price range you must be one of the first shoppers to look at it. In these price ranges you have investors and potential home owners looking at the properties. You must be vigilant, checking the search engines daily, or have your realtor set you up on an automatic update so that you will get any listing that meets your criteria for purchase. When something comes available go look at it. If it is in decent condition for the price, it is not unusual for them to sell in a very short period of time.

Dress appropriately! In the winter months, wear warm clothing, boots, sometimes the properties are not shoveled or plowed, sometimes the heat is not on. Bring a flashlight, usually the electricity is not on, even if it is, you may want to get a better look at the insulation in the attic (you may want a ladder too) or the breaker box in the basement, the flashlight will come in handy. Remember, foreclosed properties are really no place for children. You never know what you may find. If it was not winterized properly it may have mold issues and children can be susceptible to those kinds of problems, sometimes the flooring has been altered which can be a safety issue, sometimes the trash out has not been completed and there can be garbage all over. Be careful.

Remember, we are looking for ways to gain equity with your purchase. We are looking for an unfinished basement where you could finish it, adding bedrooms or bath and extra living space to add equity quickly. We are looking for space on the lot to add a bedroom or garage if it doesn’t have one or an additional garage space if there is only a one car garage. Statistically, three bedroom homes sell faster than 2 bedrooms. If you can only afford a two, so be it, look for room to add a third bedroom to the property over time, there by creating more equity for when you sell.

Look with a “buyers eye” at the curb appeal. What can you do to the entrance or the appearance from the street to make if more eye catching? Statistically you only have 90 seconds to make a good impression on the buyer of the home, what can you do, how much can you spend making those kind of improvements to better help you sell the home at a profit later down the road.

You are looking for good basics, straight roof lines, good foundation.

You will need to check the wiring, maybe not so much in the cities but here in the north woods, you will want to make sure it is a breaker vs a fuse box, the it is wires not braided wiring. Check the plumbing, has it been properly winterized or are there plumbing issues.

Please remember that if there are appliances on the sight, usually, they do not work or the previous owner would have taken them with for re-sale or re-use possibilities. If they do work, it is a bonus. The seller, the bank, makes no guarantees about any of it.

Have an inspection.

Work with a realtor, so that they can help you with neighborhood re-sale prices so that in the long run, you do not over invest in your property.

THE BUYING PROCESS

I like to negotiate from a position of strength. You will need a pre-approval letter from the bank you are working with on the mortgage. Get ready before you even go out shopping. You will need a funds verification letter if you are paying cash.

You will need earnest money. It is kind of like down payment money on a car. Foreclosure properties usually require about $1000 down. If you are working with your bank on a no money down loan you will need to talk to your banker about whether or not the earnest money will stay in the loan and thereby lowering your payments or if you will get a check back upon close.

Remember your offer is in competition with other offers. They will keep looking at other offers until yours is signed by both you and the asset manager.

Leave yourself an out. In real estate contract an “out” is called a contingency. You will want at least one of those in case something should happen. The most usual one is a financing contingency or an inspection contingency. The contract says contingency but if means “IF”! I will buy this property IF, if I can get my financing, IF it passes inspection.

Remember time is of the essence with most contracts, if you say you will have your earnest money to the listing realtor with in three days of getting the offer accepted. You need to have your money there.

Banks have their own rules and their own time frames. We must follow the rules.

I could go on and on. There is more, these are the basics.

I can not stress enough that you will want someone representing you in the transaction. Many of the long time realtors are up to their eye balls as listing agents for the banks. Find your own reputable realtor to represent you in the transaction. My husband and I have been helping people for more than 5 years now and would be happy to help you.

If you would like representation please feel free to call 715-483-1947

Patti Katzmark
Edina Realty
St. Croix Falls
http://pattikatzmark.edinarealty.com

Article Source: http://EzineArticles.com/?expert=Patti_Katzmark
http://EzineArticles.com/?Basic-Information-About-How-to-Buy-a-Foreclosed-Property&id=2028319

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Edina Realty

Five Reasons To Use A Real Estate Agent When Selling Your Home

By Jeff Lundquist

Selling a home is a very involved process. There are rules, guidelines and loopholes that the typical homeowner doesn’t know about. That’s why there are so many real estate agents in the industry – to help you sell or buy your home. You might think you can sell your home yourself and save some money, but it’s really more beneficial to your “bottom line” and your peace of mind if you hire a real estate agent. Here are five reasons you should hire an agent when selling your home.

Real estate agents have the experience and knowledge to get it done. They do this type of work every day and it’s almost like second nature to them. They can even guide you through the entire process because it will still be up to you to make the decisions. They also know more about the home, the current market and the price of the neighborhood because they receive inside information that homeowners aren’t typically privy to.

They provide an unemotional perspective. Homeowners who have lived in their homes for years often have an emotional attachment to the house. As a result, they might try to price it much higher than it’s worth to make up for the sentimental value. But with a real estate agent, you can get an unbiased perspective and opinion about the actual market value of the house. This will help you sell it faster at a price that’s fair for both the buyer and the seller.

Real estate agents protect you. It’s the same concept with the legal system – people aren’t allowed to defend themselves because it would be too easy for the other attorney to take advantage of your lack of knowledge. With real estate agents, the potential buyer’s representative might do something against regulation or “lowball” you just because you don’t know how to handle the situation. Get an agent for yourself to ensure that that you don’t get lied to and the entire deal is done fairly.

Real estate agents can save you money. You might have to pay a commission and other fees when you hire a real estate agent, but studies show that sellers who use an agent typically get more money for the house than homeowners who don’t use an agent. And even if you end up spending a few more dollars for an agent, the fact that they take care of the stack of paperwork is worth the price alone.

Agents make sure the deal is done legally. If you sell your home yourself, you might make a huge mistake that could end up costing you thousands of dollars. But if you hire a realtor, they are responsible for any problems that arise. That alone is worth the price that they charge because you can sleep comfortably at night when you buy your new home.

Hiring a real estate agent is the best way to sell your home. Even if you’ve been through the process before, rules and laws in the real estate industry are always changing. It’s a realtor’s job to keep up with these changes and they can provide you with the latest and most accurate information when they work for you. Don’t make the costly mistake of doing a “For Sale by Owner.” Hire a realtor and make the process stress-free for you.

Jeff works in Edina, Minnesota home of the first indoor mall. His website provides information about Edina realty. If you are looking for a property in Edina his site has a search of the Edina homes for sale along with information on Edina homes.

Article Source: http://EzineArticles.com/?expert=Jeff_Lundquist
http://EzineArticles.com/?Five-Reasons-To-Use-A-Real-Estate-Agent-When-Selling-Your-Home&id=1075135

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