Leelanau Living

Look no further, Cygnus Real Estate has the experience, tools and know how when buying foreclosed homes. Below of some advice about foreclosures if you are new to the game. We are here to help you make smart buys.

Foreclosure Buying Opportunities

The foreclosure process offers three bargain-buying opportunities.

• Buying during pre-foreclosure, also called a short sale.
• Buying at public auction.
• Buying bank-owned properties, also called an REO.

Should You Buy A Foreclosure?

Foreclosed properties can be a great deal for homebuyers, whether they're planning to live in the house or rent it out. But they should know the potential pitfalls.
Even for those who have some spare cash, it might not be enough to buy troubled properties that are too run-down to qualify for Federal Housing Administration or even conventional mortgages. Peeling lead paint can be enough to thwart an FHA loan, while more serious problems, like a roof that needs to be replaced, can stymie a conventional loan. In such cases, only buyers who can pay cash are considered.
Some properties simply need too much work to make much financial sense. A foreclosure might be $15,000 less than a comparable property, for example, but may need $30,000 in repairs and improvements to make it habitable. In such a case, the more expensive property is a better investment, because the work is already done for you,
Don't expect to automatically get a screaming deal. Some banks slash a property's price for a quick sale, which means you'll get the house for less than comparable homes in the area. Other banks don't offer much of any discount and intense investor interest in a property can lead to a bidding war that drives up the price.

5 Steps to Buying a Foreclosure

Buying a foreclosure can be challenge and requires some patience but offers you great value and reward in the end, if successful.

1. Learn The Process
   Learn how the foreclosure process works. Educate yourself to identify and avoid potential scams.
2. Get Financing
   Obtaining financing not only gives you an estimate of what you can afford, it also enables you to move quickly once you locate a property that interests you. When you approach a borrower/owner or a foreclosing lender about a property, secured financing will demonstrate that you are a serious buyer and are ready to buy quickly.
3. Call Cygnus Real Estate
   If you're a first-time homebuyer and you've never purchased a home, let alone a foreclosure property, it is beneficial to contact a local real estate agency, like Cygnus Real Estate, who can guide you through the process of buying a foreclosure. If you work with an agent, make sure they know your priorities. Ask any potential agents if they have experience with foreclosures. Especially for first-time buyers, a good agent can be a comforting and helpful resource.
4. Find A Property
   Buying a home in foreclosure can begin with you logging into CygnusRealEstate.com and decide where you want to search for property. CygnusRealEstate.com allows you to search by county, city or zip code. A Cygnus real estate agent can setup an automated property search which will email you a list of prospects. You can also foreclosures listed in your local newspaper.
5. Make An Offer
   If you have never purchased a foreclosure property before, we recommend that you have a real estate agent help you prepare and make an offer. To get an estimate of the potential bargain for any property, you need to find out the estimated market value of the property, how much is owed on the property and if the owner has any other loans or liens encumbering the property. Add together any outstanding loans and liens and estimated repair costs and subtract that total from the estimated market value of the property.

   Based on your research of the potential bargain, you can make an offer. Usually the offer amount is somewhere below the market value but above the total outstanding liens and estimated repair costs. If the property is a pre-foreclosure or bank owned, you could prepare an offer similar to a typical purchase offer, contingent on a full inspection and title search. Though you do an inspection don't expect the lender to repair or contribute something for damage. The inspection gives you an option to walk away if it is not acceptable.

   If the property is selling at auction, you will need to make your offer, or bid, at the auction. In many states, bidders are required to pay in cash in the form of a cashier?s check at the auction. You probably won?t be able to conduct a full inspection and title search when you buy at an auction, so it?s important to do careful research before attending an auction.

Source: http://liveleelanau.blogspot.com/2012/09/looking-for-bargain-homes-to-buy.html

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