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Times-Call / Home & Real Estate Weekly
July 11, 2009
Real Estate News
Tips for buying a foreclosed home By Holden Lewis bankrate.com
Buying a foreclosed home is a little different from buying a typical resale. In many cases, only one real estate agent is involved. The seller wants a preapproval letter from a lender before accepting an offer. There often is little, if any, room for negotiation. The home comes as is, and it’s up to the buyer to pay for repairs. On the upside, most bank-owned homes are vacant, which can speed up the process of moving in. “Buying a foreclosure is definitely a bit of a grind. It’s not easy,” says Robert Jenson, owner and founder of the Jenson Group at Re/Max Central in Las Vegas. “You’re getting fantastic pricing, but sometimes it takes going through a lot of houses and writing a lot of offers to get the home you want.”
In Jenson’s stomping grounds of Las Vegas and surrounding Clark County, the housing bust hit hard, and upward of 80 percent of homes sold are “distressed properties” – foreclosures and short sales. A short sale happens when the lender agrees to let the owner sell the house for less than the amount owed because the owner can’t afford the monthly payments. Nationwide, about one-third of sales in May were of distressed properties. A big chunk of those sales went to first-time buyers, according to Lawrence Yun, chief economist for the National Association of Realtors. The first two steps in buying a foreclosure should happen almost simultaneously: Find a real estate broker who works directly with banks that own foreclosed homes and get a preap-
proval from a lender. The goal of combing through foreclosure listings is not to find a house; it’s to find an agent. Banks usually hire one or a few real estate brokers to handle their REO properties in a market. In a lot of cases, the buyer works directly with the bank’s broker instead of using a buyer’s agent. That way, the commission doesn’t have to be split between two brokers. “A lot of these Realtors have a longterm relationship with these banks, and they know of listings that haven’t even come on the list yet,” says Elaine Zimmerman, a Memphis, Tenn. real estate investor and author. “Call them about the listings that you’re interested in, but also ask them about listings that may be coming up because sometimes it may take a day or two or even a week before a listing actually comes onto the database.” Such a request might not always pan out. In places such as Las Vegas, where thousands of foreclosed properties are for sale, you might not get much oneon-one attention from overloaded agents. To prove that you’re serious
about buying, says Jenson, “right before or after you meet with the agent, meet with the lender.” Unless you plan to pay cash, you’ll need a recent preapproval letter from a lender. The letter will describe how much money you can borrow, based upon the lender’s assessment of your credit score and income. “The problem is buyers want to find the house first, and then they think they’ll work out the financing,” Jenson says. “But the problem is the really good deals on these bank-owned, they go quick – and the buyer doesn’t necessarily have time to try to work out the financing afterward. They need to work that out first.” Zimmerman says some first-time buyers make the mistake of assuming that the bank selling the home will also finance the mortgage as part of the deal. “Don’t expect to get financing from the bank that foreclosed on it,” she says. “That’s a totally separate transaction, and they view it that way. The people in the (bank’s) REO department are not loan officers. They are getting rid of bad assets.”
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I am not the rugged outdoorsy type, but I love to celebrate the beauty of the natural world in my decorating. So when I entertain this summer, I’m inviting Mother Nature to help me dress my table with dishware, linens and accents inspired by her handiwork. If you’d like to create a memorable table that has a natural twist, start with linens that reflect the hues of the season. How about a yummy silk tablecloth that’s the color of melons? For added luxury, let the cloth spill over the table so the edges drag on the floor. Next, turn your attention to making each person’s place a bit magical. To bring in the feel of the summer woods, start each place setting with a twiggy wicker tray topped with a charger. For fun, add a bit of a surprise by layering a 10-inch-square mat of faux grass sod or an oversized faux cabbage leaf under
Spark up your summer table with accents inspired by nature. (SHNS/Courtesy The Gerson Companies)
your dinner plate. Place a majolica salad plate shaped like a leaf or flower on top of the dinner plate. For the crowning touch, put a terra-cotta oil-burning lantern or a petite potted succulent on top of the salad plate, then cover the stack of dishes with a big glass cloche. A summer decorating tool you probably have on hand: old terra-cotta flowerpots that have an aged patina. Use the flowerpot saucers as chargers or as trays to give your table garden charm.