Investing in real estate can be lucrative, but purchasing foreclosure properties isn’t without its challenges. Huntley REO sales aren’t as common as traditional home buying. However they do offer a number of benefits for investors and first-time homeowners alike. However, it’s important to understand the differences between REO and conventional sales before making a purchase.
During the foreclosure process. A homeowner’s mortgage lender tries to sell the property at a trustee sale. Or at auction to recoup the balance of the loan. If the home doesn’t sell at these events, the lender retains ownership. The property then becomes “real estate owned” or REO. It is placed on the lender’s list of available properties for sale. REO properties are generally less expensive than their conventional counterparts. And it’s essential to be prepared for the extra expenses involved with this type of transaction.
Most REO properties are often sold through specialized websites, such as Fannie Mae’s HomePath and Freddie Mac’s HomeSteps. Typically, REO properties will also be listed on the Multiple Listing Service (MLS) as well. So buyers can view them in the same way as any other home.
When buying an REO home, be sure to hire a professional home inspector. The previous homeowner likely neglected the property as he or she struggled to make payments. So the condition of the property may need to be improved. Banks aren’t required to disclose the condition of an REO property. So it’s a good idea to have the home inspected by a qualified home inspector before buying it.
Another big difference with Huntley REO sales is that, unlike conventional sellers, lenders aren’t interested in maintaining the property and may not perform repairs or upgrades. This can be a significant drawback, especially for investors who are looking to buy the property to fix it up and turn a profit.
As with any real estate investment, it’s important to have a strong cash position when purchasing REO properties. The more cash you have to put toward the down payment and closing costs, the better your chances of getting the deal accepted. The best way to demonstrate your cash flow is to bring a physical statement from a line of credit to the next meeting with the bank. Bringing this piece of documentation will instantly make your offer look more competitive and show the lender you’re serious about your interest in the property.
It’s also a wise move to offer to split the fees associated with closing an REO sale, such as transfer and escrow fees, title insurance and the like. When banks sift through the offers they receive for REO properties, a generous offer that shows you mean business will stand out among the rest.
Finally, when preparing to buy an REO home, be sure to review all the paperwork carefully. Banks tend to use their own forms and addendums that supersede standard contracts, so be sure to ask your agent for a copy of the addendums before signing them. This will help you avoid any surprises down the road.
ARE YOU IN FORECLOSURE?
Recent events in the real estate market have led to a record number of foreclosures in the Chicago land area and nationwide. Listed below are the most likely situations that lead to your property being foreclosed on. Are you in foreclosure?
The enormous amount of under qualified loans many sub-prime lenders gave out
Adjustment of ARM’s
Borrowers unable to keep up with current mortgage payments
Over valued properties
Predatory lending situations/mortgage fraud
Loss of job
Unable to sell your property due to market conditions
Whichever situation leads you into foreclosure the fact remains that a foreclosure on your credit rating will tarnish your credit for at least 7 to 12 years. Your credit is worth more than you might think. It can affect everything you do from renting an apartment, obtaining a credit card, determining your auto insurance rates, and purchasing a vehicle. Once you turn back a large asset such as a property into foreclosure, creditors will take notice. Most likely creditors will not extend credit to you or charge very high interest rates for the higher risk. Moving on with your life after foreclosure can be quite difficult for at least a decade afterwards.
Are you interested in Huntley REO Sales
YOU HAVE SOLUTIONS…
As Huntley short sale agent who specializes in Short Sales we have set out to personally help every single individual in this situation AVOID FORECLOSURE. You do have options available to you to avoid foreclosure and this is where we come in. First, you need to know these facts about foreclosures…..
Over 95% of realtors have no idea of how to handle short sales and foreclosures
Many “professionals” fail to let you know your options
The next 2-3 Years we will see a record number of foreclosures come into the marketplace keeping property values from rising
Lenders DO NOT want to foreclose on your home
Lenders are in the business of lending money not repossessing homes and then selling them again
Even though you may be in foreclosure YOU STILL OWN THE PROPERTY AND HAVE RIGHTS!!!
WHAT ARE YOUR OPTIONS?
Your options depend on what you want to do with your property.
Do you want to stay in your home or just get out of it all together?
Can you keep up with your monthly payments or is just not possible anymore?
Can you keep up with your monthly payments if you had a lower interest rate?
The answers to these questions can help in determining what your best option may be. For a full list and brief explanation of your options click on “Alternatives to Foreclosure” section on this website.
Here are some other facts about foreclosures you should consider.
In Illinois the foreclosure process is a lengthy and can take up to 9 months after the notice of default date. This can be delayed if you have the proper representation. Therefore, after you have missed your first payment it can take approx. a year before your lender will actually foreclose on you and repossess your property.
For the Banks/Lenders the foreclosure process is COSTLY. They don’t want to be in the business of repossessing properties, maintaining properties, and then selling these properties.
Lenders do not like excess inventory or foreclosures on their books
Mortgage holders can lose a lot more money if the property goes to auction
Lenders are not in the business of selling properties they are in the business of loaning money to people who buy properties. Selling properties is looked as a loss to their bottom line.
A home owner who goes through foreclosure is ineligible for a Fannie Mae backed loan for 5 years thereafter, and an investor owner for up to 7 years.
Future mortgage loans and interest rates will be affected because the foreclosed homeowner must answer “Yes” to form 1003 Uniform Residential Loan Application question “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?”
A foreclosure affects credit scores downward 250 to 300 points, typically for over 3 years.
Foreclosure stays on credit history for approximately 10 years.
Current and future employment may be affected as many employers now require credit checks, particularly for employees in financial or sensitive positions.
Outside of conviction of a crime, foreclosure is the most serious issue affecting security clearance for your job. For those who have careers in law enforcement, the Military, a security company, the CIA or other government agencies, a foreclosure could mean the immediate loss of the security clearance and the position.
Remember, if your facing a foreclosure you do have options and alternatives. The sooner you act the more options you have. We strongly encourage you to call Huntley short sale agent at 847-287-8742 for a consultation where we can further assess your situation.
Our home default specialist team is fully staffed from an attorney who specializes in these situations to a full loss mitigation team of professionals who know how to talk to your lender. You are covered every step of the way.
And remember all our services at Huntley short sale agent are free of cost to you. We earn our commissions by negotiating the short sale and selling your property. Our commissions are paid by your lender.