Clear Lake Texas Real Estate – Is a Foreclosure Really for Me?

Topics: Newsroom Posted on July 22nd, 2009

Buying a Clear Lake foreclosure can be exciting, and challenging all at the same time.
There are some differences between purchasing a foreclosed home and a
“normal” transaction between a buyer and a homeowner.

It is not uncommon for example to be in a multiple offer situation where one
home can have as many as 8 or 10 offers.  In addition, the banks can take
some time just to find out if they’ve accepted your offer.  Sometimes it can
take up to a week.

Foreclosed homes are sold “as-is.”  The banks do NOT make repairs.  You’ve
heard the expression, “what you see, is what you get.”  It’s never been more
true than in this case.  You can have inspections done and you have the
option to either (a) move forward, or (b) terminate the contract and receive
your earnest money back.

While we’re talking about earnest money, although I don’t see it often, I’d
say that about 20% of the time, the banks are now requiring 3% as earnest
money.  Quite a bit different than the typical $1,000 you might see.  This
means on a $150,000 home, $4,500 would be required for earnest money. Budget
accordingly.  It’s critical to close on time as well.  The banks often will
charge a per diem penalty for not closing on time; generally .1% of the
price.

I want to buy a foreclosure- but one in GREAT condition.  Remember how we
got here.  If a homeowner could not make the payments and the bank took the
property back, they didn’t have the money to make repairs, or do normal
maintenance.  Like anything else, some homes are in better condition than
others.

You MUST have an approval letter from a reputable lender.  Another little
requirement for some banks (Wells Fargo is a good example) is that they
are now requiring not only an approval letter, but an approval letter from
the same bank that owns the property.

Now this one IRKS me! 

It seems it should be illegal.  But, it’s the way they’re playing the game. 
In some cases, they won’t even LOOK at your offer until they have that letter.

They “claim” that you do not have to use them for your mortgage and that it
is just so that they can feel comfortable taking the house off the market
while you get your loan etc.  But I promise you, they want to “encourage”
you to use them as the lender.

Don’t get me started…

Here’s the thing.  I should have been an educator because I believe that
many of the horror stories you hear about someone buying a home, really did
not have to be that way.  It’s about managing expectations.  As a homebuyer
whether you’re buying a foreclosure, or a home from a homeowner, you MUST
be knowlegable.  And, you need to know BEFORE you get into the home buying
process; before you get caught up in the emotional part of purchasing a
home.

That’s it for this week.  Stay tuned.  More to come…

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This entry was posted on Wednesday, July 22nd, 2009 at 9:43 pm and is filed under Newsroom. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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