Buying Foreclosed Homes - FAQ

· Is buying a home at the time of foreclosure the same as buying a home that has already been foreclosed upon?

No. There are two different types of Home Foreclosure purchases. The first is when the lender actually forecloses on the property. Potential buyers can show up in court and bid on the Home Foreclosure. The second type of Home Foreclosure purchase is when the lender or insurer actually owns the property and is selling it as rightful owner.

· Is the escrow the same as a typical real estate transaction?

No. When buying Home Foreclosure at the time the lender takes the property back, the buyer shows up in court, bids on the property, and if the bid is accepted, he or she must buy the property with a cashiers' check, without inspections, and without any contingencies. If buying from a lender or insurer after the property is already foreclosed on, the buyer still has the opportunity to negotiate the pricing and terms, but due to the competitive market, the lender usually ends up calling most of the shots.

· Do foreclosures have any additional legal concerns or fees?

No. With proper inspection, a Home Foreclosure should not provide any additional legal concerns or fees. That being said, remember that most Home Foreclosures are sold "as is," and because the lender has never lived in the home, so they don't know the intricacies that may normally be required on a disclosure (such as leaking roofs, electrical problems, etc.).

· Is buying a foreclosed home risky?

No. Buying a foreclosed home doesn't have to be risky if you do a thorough investigation. Remember two considerations: Lenders will have limited information to work with for disclosures. Also, people sometimes get excited by the notion of a "sale," and overlook the true value of the Home Foreclosure because of a "perceived value" issue. Tip: Try to forget that it's a foreclosure and think of it as a piece of real estate.

· Does the buyer of a foreclosed home have any exposure to past taxes or liens? Does the seller guarantee a clean title?

No more than usual. It's standard in most states to get a title insurance policy which insures against any additional liens.

· Is a foreclosure always an "as is" deal or can the buyer negotiate with the bank for repairs or improvements?

Buyer can always negotiate, but Home Foreclosure market conditions usually favor the lender, who will probably sell the property "as is."

· Is a foreclosure deal all cash or do I have a chance to secure financing?

If you're bidding on a Home Foreclosure at the time of court proceedings for the foreclosure, you'll have to have the cash in hand. If you're purchasing a Home Foreclosure from the lender you have the opportunity to secure financing and sometimes lenders offer opportunity for financing as well.

Home Foreclosure

Home foreclosure is the legal method that a lender can use to repossess (or take over) a home. This informational site provides objective information on a wide array of topics as they relate to home foreclosure, like Avoiding Home Foreclosure with Foreclosure Loans or Home Refinance Loans, as well as important information on the Home Foreclosure Market for anyone interested in buying a home foreclosure.