House Rules from RealtyTrac
House Rules
Thinking of buying a distressed property? It’s very different than a standard real-estate transaction. Here are some pointers:
- Distressed-property listings can be obtained from local real-estate agents, classified ads and Web sites such as RealtyTrac.com, Foreclosure.com, Trulia.com and Zillow.com, as well as bank Web sites.
- Work with experienced real-estate agents and brokers with special training in foreclosures and short sales.
- Get pre-approved by a lender, or certify that you have sufficient cash available, before bidding on properties. Auction buyers must be prepared to put down a cash deposit of 5 to 10% cash and pay the balance within 30 days in many states—and in some states, on the same day.
- Get a thorough inspection by a qualified professional inspector or home-inspection engineer prior to auction or sale.
- Arrange for a thorough title search and title insurance.
- Be prepared for a long wait to hear back from the bank on a short sale, but be prepared to how to get prescription drugs without a prescription move quickly on a foreclosure; banks often set strict timetables on foreclosures.
- First-time buyers with minimal cash and little time or aptitude for repairs probably should avoid foreclosures, and inexperienced purchasers should avoid auctions.
Sources: RealtyTrac.com; Distressed Property Institute; HUD; WSJ research
“It was nerve-racking,” says Mr. Shearn, 41, a university research scientist. There was a long delay hearing back from the seller’s bank, and the last-minute discovery of a lien from an unpaid water bill—the water was about to be shut off.
But in the end, Mr. Shearn, says he and his wife, 42, a co-owner of a software company, were happy. “We really lucked out to find this house.”
Short sales like the Shearns’ are particularly complicated. Lenders require detailed information about both buyers’ and sellers’ finances, and homeowners generally have to prove hardship. The entire package of documents is scrutinized not just by lenders but by the mortgage investors. Second- and third-lien holders frequently hold up transactions demanding a larger share of the settlement. The average transaction takes four to six months or more, agents say.
Lenders say they are stepping up their efforts to handle short sales. J.P. Morgan Chase & Co. has doubled the number of employees handling
Categories: Buyer news
Tags: Distressed Housing
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