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The Process of Buying Foreclosure Properties

 

Listing your home can be overwhelming, so we created a list of our top tips in order to prepare your home to sell. 

 

Consider watching this video by Lisa Moore and Chip Jones on how you can purchase a foreclosure property! What is the process of buying foreclosure properties? Here's are some of the details we will go over:

- What are REOs?
- How to purchase foreclosures
- How to find foreclosures
- Home inspections on foreclosures
- Types of REOs
- Putting an offer on a foreclosure home
- Closing on a foreclosure property
- Title work and liens on a foreclosed home



What are REOs?
REO means Real Estate Owned, which is a bank-owned property. These properties have been turned back over to the banks because the people who lived at the property were unable to pay their mortgages for one reason or another. A bank or lender takes ownership of the foreclosure after an unsuccessful sale at a foreclosure auction. It may have been unsuccessful because of the lack of bids. After the fail of sale at the auction, it is considered an REO property. Any type of property can become lender-owned from detached houses and ranches to land and condominiums.
 
How to Find Foreclosures
First, call an MTM agent to help you look on the MLS (Multiple Listing Services). Typically, a real estate agent and the lender have done a market analysis and have come up with a fair price. You shouldn't expect the home to be undervalued, but you can expect the home's value to be reasonable.

Your agent has local connections, so your MTM agent can most likely help you find properties faster than you could find yourself. Our agents have direct connections to the lenders in the area, and can find several REO properties near you!

Sheriff Sale Lists and Tax Sale Lists are also some options to look into when trying to find an REO home listing. These are available at the courthouse. You may also want to check out local auctions in your area!
  
How to Purchase Foreclosures 
Cash is king- especially when it comes to REOs! It can be a tricky process to navigate, so make sure you communicate well with your real estate agent to get the right price for the property. Negotiation is key, so leave that expertise to your agent.

Often times, they need quite a few repairs, and banks typically don't want to lend for that reason. To better your chances and to be competitive, consider writing an offer with a cover letter. In the cover letter, write your willingness to accept the home "as is." To protect yourself, add verbiage that will allow you to leave the deal if a home inspection reveals more damage than anticipated.

Remember, paying with cash is easiest to do in this tricky process! It's also quick and clean when paying with cash.

Home Inspections on Foreclosures
You can still get a home inspection just to know as much about the property as possible before you close the deal. You can also make the deal contingent upon the inspection results. Most of the time, you're buying an as-is property and the lender won't do repairs. This ensures that the bank does not have any legal responsibility on the homes' damages.

It can still be important to understand the homes flaws and safety issues such as moisture, pests, leaks, and other unhealthy damage. Getting a home inspection can also help you make informed decisions on whether the home is a good fit for you or not. 

Types of REOs
- FHA (Federal Housing Administration) Loan Homes that have gone through foreclosure becomes a HUD (US Department of Housing and Urban Development) REO property. HUD becomes the property owner, and they want to recover some of the loss that occurred during the foreclosure process.

- VA (Veteran Affairs) is the Department of Veteran Affairs. The US government assigned the VA to assist in helping veterans of the armed forces across the nation. These VA REOs have gone through a VA foreclosure. This happens when the homeowner has not made monthly payments towards their mortgage and the VA forecloses on the property. 

- Bank-Owned REOs - owned by banks or lenders like Fannie Mae and Freddie Mac. These lenders are typically the original loan source. After foreclosure, the bank becomes the property's owner and try to regain some of the loss.

- Investment companies can also buy large pools of bad loans. An MTM agent can help you find REOs best!

Putting an Offer on a Foreclosure Home
It can take awhile to get a response from the bank to your offer because you're trying to purchase an REO foreclosure property. A foreclosure home may get multiple offers, and the competition can be tough. You'll have a greater opportunity to negotiate lower prices with homes that have been on the market for a longer period of time.

It can help to have your buyer's agent get the property history of the foreclosure to compare the prices that the bank is asking for. Your agent can also compare this price in an analysis of comparable homes in the local market. Your pre-approval letter may also heighten your chances of getting an accepted offer, especially if you don't ask the REO bank to pay for any repairs or inspections. 

Closing on a Foreclosure Property
A lot of the times, instead of going to a title company, a remote closer will be sent to the bank, your real estate agency or wherever needed.

Title Work and Liens on a Foreclosed Home
Be sure there are no leans on the property. It's best to have one of our experienced MTM agents look over your contract and title work. Then, change your locks!
 

 

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What our clients are saying  

Since selling me my first Indiana home Jari and Dave have become not just my realtor but also my best friends! People like Jari and Dave are very rare these days and should be cherished! They also just sold my home and sold me my new lake house.

 

~ Wade Sadberry

Jari Troth was my Realtor for the property I purchased. At all times, she was very responsive, professional, and responded to all of my questions in a timely manner. I would recommend her services at any time, and would be happy to serve as a reference for her services.

 

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Jari it is always a pleasure working with you thank you for all your help we appreciate it

 

~ Claudia Sanchez

Jari Troth, with MTM Realty, goes the extra mile! She was fantastic to work with in every way!

 

~ Lisa Smithson

Sheila was readily available any time we had questions or concerns and made us feel like we were her only clients even though she was helping other home buyers at the same time.

 

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Sheila did a fantastic job. Always able to answer any questions I had. Highly recommend.

 

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Very helpful in the transition of buying and selling a home. Thanks lisa!

 

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Great service, knowledge. Realtors friendly. Staff goes out of the way to help you.

 

~ John Boumenot

Sheila is just great to work with.

 

~ Susie Richter

Sheila Saunders is amazing! She helped me every step of the way with the purchase of my new home - from the MANY appointments to look at prospective homes to closing day. She always went above and beyond to help me find the home that was best for me. She was extremely knowledgable of the process and if there was something she didn't know, she found the answer for me. She made this stressful situation not nearly as stressful. I will forever be grateful to Sheila! She's not only a great realtor, but a great person!

 

~ Laurie Tarnow

Jari did so much for me that I could not begin to mention them all. She was the absolute best. She went over and beyond in helping me, advising me. She was perfect. For anyone wanting to sell their home or a first time buyer, call Jari Lynn Troth. You won't be sorry.

 

~ Anonymous

Jenn made our buying process so easy! We were very picky and house hunted for 3.5 years and she never once gave up on us. We appreciate everything she did for us and thank her for always being there whenever we had questions or houses we wanted to jump on. Thank you Jenn!

 

~ Chelsea Waak

Just bought my second house by myself and had a wonderful experience! Much thanks goes to Sheila Saunders for her professionalism, her expertise, and keeping on top of everything at all times so I always knew what to do and when to do it. Couldn't have been happier with the experience! I totally trust Sheila and MTM and will have Sheila sell my old house for me as soon as it's ready.

 

~ Susie Richter

We put our house on the market this year with MTM Realty, Darlene Jesch, Realtor. We had multiple offers the first day. MTM has a process in place to evaluate and present the offers we received. It made our decision easier. We highly recommend MTM Realty and Darlene Jesch.

 

~ Sissy Robberts

For anyone wanting to sell their home for a first time buyer, call Jari Lynn Troth. You won't be sorry.

 

~ Anonymous

Jari was such a monumental help in our first house buying adventure. We couldn't have done this without her. She was very knowledgeable in the house buying process and helped ensure we got the best house available in our budget.

 

~ Anonymous

Darlene is an outstanding realtor. We enjoyed working with her!

 

~ Anonymous

We put our house on the market this year with MTM Realty, Darlene Jesch, realtor. We had multiple offers the first day. MTM has a process in place to evaluate and present the offers we received. It made our decision making easier.

 

~ Kim Schlosser

I appreciate the friendliness and professionalism of the MTM staff. They made purchasing a home stress free!

 

~ Stephanie Dubbs

The best customer service!

 

~ Patrick Gondeck

Lisa was incredibly easy to deal with and extremely knowledgeable when it came to selling our home for us! Very attentive to our questions and our requests, she made the transaction very pleasing. We would highly recommend Lisa and the MTM team for your next real estate needs.

 

~ Steve Raymer

I can't say enough about Lisa. She went above and beyond for us during the process of selling my home and buying a new one. I would highly recommend Lisa and the team at MTM.

 

~ Andrew Snyder

An incredibly professional staff that goes out of their way for their clients. If you're selling or buying, I highly recommend them.

 

~ Dennis Bennett

Chip is great to work with. Did whatever he could to help us work through any hurdles we came across.

 

~ Ryan Readshaw

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