Foreclosure Tips

By dallasrealtor | January 19, 2009

In today’s market it seems as if everyone is looking for a good deal.  Who can blame them?  Home buyers who want a good deal in real estate typically look for foreclosures.  It’s the desire to own something for little or nothing.  Maybe they can fix a house up that has minor work that needs to be done or a house that needs something major like a roof.  If the prospective buyer is someone who works in the roofing industry or the plumbing industry it’s easy for them to inspect a home that needs that kind of work and ultimately fix the problem themselves.  This saves them thousands of dollars. 

The truth of the matter is, in today’s real estate market, Dallas foreclosures are in abundance, but the work that needs to be done to get them in livable condition is usually sizable.  It’s not always that a house goes into foreclosure and the homeowner continues to live in it and take really good care of it.  Unfortunately, that is not the case.  Foreclosure homes are many times in very poor condition.  A lot of times there is furniture still in the home that will need to be removed and the if it’s a pool home, you can just imagine what the condition of the pool will be.

Now that the reality of a foreclosure home has been spelled out, one needs to consider whether or not this is something to pursue.  If so, there are a few things to keep in mind.  Foreclosures happen due to hardships.  They owners may have been laid off or fired from a job, they may have had medical problems, divorce or even a job transfer that prevented them from being able to continue to pay on their existing mortgage.  The purchaser of a foreclosure home will need to review the proceedings vary   Every state’s foreclosure proceedings vary.   In the case of an existing mortgage, home owners can end up staying in the property for up to a full year.  In states where trust deeds are in effect, it can take several months in order for the homeowner to vacate the home.  

Investors who specialize in buying foreclosures often prefer to purchase these homes before the foreclosure proceedings are final. Before approaching a seller in distress, consider:

Almost every state provides for some period of redemption. This means the seller has an irrevocable right during a certain length of time to cure the default, including paying all foreclosure costs, back interest and missed principal payments, to regain control of the property. For more information, consult a real estate lawyer.

Many states also require that buyers give to sellers certain disclosures regarding equity purchases. Failure to provide those notices and to prepare offers on the required paperwork can result in fines, lawsuits or even revocation of sale.

Determine whether you’re the type of person who can easily take advantage of a seller’s misfortune under these circumstances and / or put a family out on the street. Oh, critics will argue it’s just business and sellers deserve what they get, even if it’s five cents on the dollar. Others will feign compassion and trick themselves into believing they are “helping” the home owners avoid further embarrassment, but deep inside yourself, you know that’s not true.

Buying a Home at the Trustee’s Sale

Check with your local county office to find out how sales in your area are handled, but common threads among most of them are:

No loan contingency
Sealed bids
Proof of financial qualifications
Sizeable earnest money deposits
Purchase property “as is”

Sometimes buyers are not allowed to inspect the house before making an offer. The problem with buying a house sight unseen is you can’t calculate how much it will cost to improve the structure or bring it up to habitable standards. Nor do you know if the occupant will retaliate and destroy the interior. On top of that, you may need to evict the tenant or owner from the premises after you receive title, and eviction processes can be costly.

Please contact us for all your real estate needs when it comes to Dallas foreclosures.

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