Buying a Foreclosure – Have a Professional Inspector take a look.

When purchasing a Foreclosed property or Bank Owned Property (REO) have a professional inspector inspect the property.  You will HAVE to purchase the property in ‘as-is’ condition.  This is due to the fact that the seller (the lender) has never lived in the property (so they do not know the condition of the property) and thus will not make any representation as to the condition of the property. 

The property you are purchasing has more then likely been winterized which means that the water has been shut of and drained.  In addition most of these properties are without gas or electricity.  This means that the buyer has no idea as to the condition of these utilities. 

I urge buyers to hiring a professional home inspectors to see if there are any signs of a possible problems which can be done even if the there is no water, gas, or electricity in the house.  Also, you may want to hire the inspector to come back after the purchase once all the utilities have been turned back on. 

I also recommended that the buyer request for the utilities to be turned on for the inspection. The listing office or seller does not always allow this request, but it doesn’t hurt to ask. 

Lastly, make sure that you have additional money in the event that repairs are needed after you have purchased the property. Remember there is some risk with buying a foreclosed property, but there are also many benefits.

Please Contact Matt with any questions, Matt@PrairieShore.com, or 773.244.9455.

 

Matthew C. Putnick

Prairie Shore Properties

4109 N. Lincoln Ave.

Chicago, IL 60618

Buying An REO In The Chicagoland area – Tips For First Time Homebuyers

Buying a foreclosure offers definite benefits to first time homebuyers that want to get into the market. Below are a few key points to consider once you have decided that a bank-owned property is the right option for you.

·        Get Pre-Approved for a home loan – this way you know how much of a loan you can afford.

·        Understand that REO properties are sold in “as-is” condition so there are no guarantees as to the condition of the property.

·        Contact an experienced REO real estate agent that is saavy on the REO buying process (especially the competitive bidding process).

·        Identify the neighborhoods in which you are most interested in.

·        Once you have found a property of interest, make certain to have your real estate agent determine a fair market value of the property.

·        Find out how many offers are on the REO home.

·        If you decide to make an offer make certain you have a pre-approval letter in hand from your lender to submit with the offer.

·        Make sure your real estate agent request time to complete a professional home inspection on the property.

It’s not uncommon for desirable REO homes to get a dozen offers. It’s also not unusual for the bank to narrow the field of competing bids to two or three offers and require the remaining interested parties to submit their highest and final offer. Going into the negotiation with a “highest and final offer” mentality will enable you and your agent to beat out the competition.

This information is provided as a service to prospective buyers thinking of purchasing an REO in the Chicagoland area by Matthew C. Putnick, a Licensed Realtor in the State of Illinois, with Gibson & James Properties, Inc.  Matthew Putnick operates www.210days.com, a website dedicated to the buying and selling of distressed properties.

E. Matt@GibsonandJames.com / C. 847.910.5449 / F. 773.549.2057

Thinking about buying an REO? How To Minimize Your Risk

Thinking about buying an REO? How To Minimize Your Risk

 

An REO (Real Estate Owned) is a property that becomes the property of a mortgage company after a foreclosure action is completed. 

 

Mortgage Companies are not in the business of owning real estate.  Their core business is to make money from their loans.  With today’s rise in foreclosures, lenders are ending up with a large inventory of family homes. For this reason, savvy buyers can seize a prime opportunity to purchase a home at a great price, while investors can bolster their existing real estate portfolio.

 

2 Key Aspects to consider before purchasing an REO

 

1. Risk – The greater the risk the greater the reward. Its important to know that REO’s carry some risk. They are always sold in ‘as-is’ condition with little or no information concerning the condition of the property.  Locally REO properties are often winterized which means that the utilities to the property have been shut off.  Most REO listing offices will not allow the utilities to be turned on even to inspect the property.

 

2. Hard Work –Generally REO properties are dirty, can be filled with junk, and may be without appliances/cabinets/vanities/countertops etc.  In addition, a vacant home is a prime target for burglary and vandalism. For these reasons buyers need to be realistic about the cost to clean up or fix up the property to live in or to sell.  If you don’t have the extra money for repairs or don’t like the idea of putting in your own time to fix up the property, then an REO property will not suit you. 

 

The REO market is risky and does involved work – with that said the best way to minimize your risk and amount of work is to form a team of real estate experts around you.

 

1. Realtor – Using an REO experienced Realtor, like myself, is a must.  Not all REO properties are good investments and an experienced Realtor can guide you to a solid investment.  Real estate offices that list REO properties tend to have a huge inventory of listings and lack any type of customer service that you will need. An experienced Realtor can advise if the price is a good deal and can make certain that the transaction moves forward. 

 

2. Attorney – When buying an REO – lending companies will have you complete their own contract and disclosures.  Since each lending company has their own documents it is imperative that you retain a Real Estate Attorney that has experience in assisting buyers purchase REO properties.  

 

3. Inspector – An experienced home inspector is crucial!  It is important that you know what repairs are needed and the cost associated with those repairs. It is the only way to accurately estimate your costs to restore the property.  Even if the utilities are turned off you should hire an inspector.   REO properties are sold “as is” with no warranties or guaranties.  You must look at this property with an experienced inspector to understand the financial value of your total investment.

 

4. Lender – Should you use a conventional loan? A rehab loan? An FHA loan? A good lender will highlight the pros and cons of different loan programs so that you can make an educated decision.  Your choice of lender can be the difference between closing on a property and having a deal fall apart on the day of the closing.

 

If you have the patience, the right attitude, and experts on your side, it is likely that you will find an REO property that is exactly the deal you’ve been waiting for.  If you think purchasing an REO might be a great way to build your wealth call me.  I am always happy to share additional knowledge and/or assist you in looking at some REO properties in any area of the city or suburbs of Chicago. 

 

E. Matt@GibsonandJames.com

C. 847.910.5449

 

 

 

 

What Today’s Homebuyers Are Looking For

Whether you are looking to buy, sell, or are invest in real estate it is important to know what is important to today’s buyers.  Below are the top 6 features that are most important to buyers when considering a home to purchase.   

1. Central Air Conditioning
2. Oversized Garage (2 or more spaces)
3. Walk-in Closet (in Master Bedroom)
4. Access to Technology (Cable, Satellite, Internet)
5. Energy Efficiency
6. Investment Potential

 **This information was provided by the National Association of Realtors (NAR) in there 2007 Profile of Buyers’ Home Feature preferences.