You are here:

Buying or Selling a Home/buying a home in foreclosure

Advertisement

Expert: John Hendricks - 12/7/2007


Question
We are looking at a home that will be foreclosed on this month. I just want to know the process of purchasing this property, and if I will get stuck having to pay their taxes and other payments that they did not pay. Also what would be a good amount to offer. I don't know what they owe or much of anything for that matter. What would be the best way to go.

Answer
Dear Travis;

Thank you for your question.

Buying a foreclosure property is not as easy as it may sound. Depending if you are working with the seller to buy their home prior to the foreclosure or if you are going to buy the home on the courthouse steps it is important to understand how to precede properly.

If you were to buy the home from the Seller directly to bypass the foreclosure, I would employ either a Realtor or an attorney who is familiar with properties in foreclosure. Using a Realtor should not cost you money as the seller will pay for the service and if there is not enough equity to pay for the fees, the agent will negotiate with the lender for their fees. An attorney may charge you personally for their fees to represent you. It is recommended that you be pre-approved for the purchase or have cash to close prior to an offer being submitted. Due to the circumstances, short time lines should be used for inspections and formal loan approvals, complimented by a quick close of escrow. Once your offer is accepted, escrow will be open and all details (liens, past due taxes, etc), and all other items that have an effect the property will be noted in the title report for your review for your approval or disapproval. If there is not enough equity or money to cover these items, you will have to make the decision whether to accept the roll of paying off the items disclosed or kill the deal.

If you were to purchase the home on the courthouse steps, it is considered an as is sale and you are responsible for many of the liens if any that are associated with the property. It is your responsibility to search county records for any such liens that you would be responsible for or any other items that effect the property prior to your purchase. Secondly, there are no inspection contingencies, so it is buyer beware, you have now accepted the property in its present condition…end of story. Thirdly, it is an all cash purchase, no loans are allowed. You will have to have cashier’s checks in denominations that will add up to the purchase price.

You may want to go to the courthouse to find out when the next sale or sales take place. You should attend the courthouse sale of these properties and you will learn what it takes to purchase a property under these proceedings. After a sale takes place, step aside as the representative is leaving and ask for a few moments of their time to explain what it actually takes as a buyer to purchase a foreclosed upon property.

Lastly, if you employ a Realtor to help you find a seller of a home in distress, and you have the patience to wait for the right deal, you can usually find a property that would meet your objective and still have the protections afforded to you when buying a home under normal circumstances.  If you need the assistance of finding the right agent who specializes in properties in distress, and will help you through this process, don’t hesitate to call me or e-mail me with contact information. I have established relationships with Realtors throughout the country and I would be glad to help you find the right agent to help you through the process.

I am a Realtor in California and the laws and regulations may be different in your state. I always recommend seeking legal counsel or a Realtor to advise you accordingly before making such a large investment and not rely on my recommendations alone.

I hope this was of help to you… Good luck!!!

Warmest Regards;
John Hendricks
415-259-4518
JohnHendricks@Marin1.com

Buying or Selling a Home

All Answers

Answers by Expert:

Ask Experts

Volunteer

John Hendricks

Expertise

As a California Realtor for 23 years practicing in Marin and Sonoma Counties, it is now time to provide counsel through AllExperts.com to those who need advise in real estate. My knowledge and experience includes a wide range of resale residential real estate purchases, new home sales, income related investment properties involved in 1031 exchanges, and land. Let me help you in any of these areas...

Experience

John Hendricks has established himself as one of Marin & Sonoma Counties premier Realtors. A native Californian, John is a well-known and respected Realtor in both Marin & Sonoma Counties who has resided in the Northbay since 1976. John began his real estate career in 1986, and since then has distinguished himself as one or Northern California's top producing Realtors. Before joining Frank Howard Allen Realtors, John was an associate of the Prudential California Realty from 1990-1992 where his outstanding sales achievements earned him one of the company's highest honors, the prestigious "President's Circle Membership", presented to the top 2% of associates for sales and earning excellence. Since his association with the highly regarded Frank Howard Allen Realtors in 1992, John has once again established himself as one of his company's Top 10 Producing Realtors in Marin & Sonoma Counties for the years 1993 through 2007 and now in 2008. Five continuous years of outstanding performance has now allowed John to join 15 other Realtors in the prestigious "Lifetime Hall of Fame" for Frank Howard Allen Realtors. John established a group of professional individuals who specialize in a variety of areas in real estate called, 'Lundmark-Hendricks Fine Homes' This group of professionals are dedicated to the success of representing clients with the greatest amount of care and service when either buying or selling real estate.

Organizations
California Association of Realtors National Association of Realtors

Education/Credentials
Upon Request...

Awards and Honors
Frank Howard Allen Realtors "Hall of Fame Member" Chairman's Circle for 10 consecutive years

Past/Present Clients
Joe Louis & Sharon Sigurdson We want to thank you again for your excellent representation of interests during the recent purchase of our home in Petaluma as well as the sell of our home in Mill Valley. We had the unusual pleasure of working with you during the last year both as sellers and buyers. We felt that our interests were always paramount and that we received a very fair price for the sale of the Mill Valley house as well as our purchase of our new home. This speaks particularly well of you, because of the recent unstable and chaotic real estate market. Will Finke "Quite frankly, we came out of a very difficult situation, which time does not allow elaborating on. This was one of the greatest experiences of our lives as clients. John Hendricks is one of the top businessmen I have ever met." Bruce & Nancy Rosentreter "I chose John Hendricks to sell my house. I picked him because I thought he was professional, aggressive, and that he could get top dollar for my house. He fulfilled my expectations completely." Joy Schuelke "Since we were trying to sell a high end home in a very tough market, and in the middle of a very rainy winter, the prospects seemed quite bleak. I was convinced at the time, and am even more so now, that without John's tenure, patience, and tenacity, we would have not been able to move the property." Lynn McCarthy "I cannot stress strongly enough how impressed I was with the service provided to me by John and his group. Throughout the entire transaction, John was always available, always forthcoming with excellent advice based on his years of experience, and always willing to put in the extra effort to make this a positive experience for me. I feel lucky to have had the experience of working with him." Lea Lieurance-Turk "Thank you John for your outstanding real estate services for the past 5 years I have known you. You have made my dreams come true as far as selling and buying property."
http://www.LundmarkHendricksFineHomes.com

©2012 About.com, a part of The New York Times Company. All rights reserved.