You need a Realtor if you are buying a foreclosure.

These are trying times for many homeowners. Walk away from a mortgage? Something that was unthinkable and morally offensive 10 years ago is now an option many people are choosing. Home foreclosed? Some people who’ve lost their homes to the bank are stripping the property bare, hoping to sell the appliances to recoup at least some money.

As you might expect, buying a foreclosed home comes with opportunities — and certain challenges. Here are five potential landmines to look out for when buying a foreclosed property.

The process is highly impersonal

With a foreclosure, you’re not buying the house directly from the person who lived there. You’re buying it from the bank that foreclosed on the previous owner. And in the bank’s mind, the property is simply an asset it needs to get off its books. The bank doesn’t see it as a place to live or where someone raised a family or even where you’ll potentially raise a family and make memories.
Because you’re dealing with a bank, not an individual homeowner, be prepared to wait for a few days, if not weeks, for a response. Don’t think about writing a cute note or introducing yourself directly or through your real estate agent. For the most part, the bank’s agent doesn’t even show the contract, the pre-approval letter or any of the offer pieces to the bank. Instead, the bank’s agent inputs the data into a website or piece of software. The asset manager — the bank’s seller of the property, in other words — simply sees the bottom line number. For the bank, it’s just a numbers game. Are you getting the sense that this will be a highly impersonal process?

Work with a Realtor at our company www.wallergrouphomes.com

Don’t expect disclosures

REO stands for “real estate owned.” An REO property is one owned by a bank after going through the foreclosure process.
In an REO sale, there aren’t any disclosures. You won’t have any knowledge of the previous seller’s experience. If there’s not a seller on hand to answer questions about the home and the neighborhood, you’re going into the foreclosure sale blindly. So it’s important to do the most due diligence possible. This may require going to the city’s building department to check past permits and records and to double- and triple-check the preliminary title report.
Bottom line: Work with your buyer’s agent to learn as much as possible about the home and the neighborhood. If the property sold in the past five years, your agent may be able to obtain past disclosures.

Prepare to see homes stripped bare

A multi-million dollar home was once foreclosed on in San Francisco’s Castro neighborhood. Before the seller left, he removed every appliance and expensive light fixture as well as the majority of faucets.
Some homeowners may have struggled to keep the property or even attempted to sell as a short sale, but the bank wouldn’t cooperate. The homeowner may have hard feelings toward the bank and therefore might felt justified damaging the property before leaving. Ultimately, this will hurt the home’s value. You, as the buyer, will be responsible for any fixes. And you should account for any missing fixtures and features in your offer.

Don’t expect the bank to give you credits or fix things

Your offer and the likely discounted list price (discounted from similar comps nearby) should already account for the risk you’re taking on an “as is” property. There won’t be a disclosure about a leaky window or the broken water heater from last year or the outlet in the kitchen that’s not working correctly.
As a buyer, your contract will allow you to have an inspection, so get the biggest and best inspection you can possibly have. If you can get your hands on an old inspection report, review that prior to making your offer.
For example, prior to a home going into foreclosure, the seller had a buyer lined up. The home was to be sold in a short sale. The inspections came up with too many issues, and the buyer walked away. Through the real estate community, the agent representing a potential buyer of the property after it had been foreclosed upon got her hands on the old inspection report. She gave the report to her client, saving him a lot of time and money.

The bank will have its own processes

The bank usually won’t use the local contract from the board of Realtors. Nor will the bank follow any of the norms, processes or mores that are standard in the local real estate community. Instead, the bank will have its own contract that protects its interests. This contract will be followed by dozens of pages protecting the bank from future lawsuits, referring to the sale as “as-is” and putting nearly all the burden on you, the buyer. The bank won’t allow the property to transfer unless it is done this way. In some states, if the bank requires the buyer to use a particular title company, then the bank would be required to pay the buyer’s premium on the title insurance. This could translate into huge savings for the buyer.
To sum up: There are many tempting deals out there among foreclosed homes. You should absolutely consider them — but make sure you’re not getting less than you bargained for.

Some tips on buying Bank owned REO properties

Tips for Buying Bank-Owned REO Properties
While buyers have found few large discounts among bank-owned foreclosures, opportunities for bargain hunters are likely to improve if mortgage defaults continue to increase. Across the country, a staggering number of homeowners are entering the foreclosure process and many are losing their properties to the bank or lender. As the inventory of bank-owned properties grows, lenders nationwide will be more open to negotiate price and other terms. And prospective homebuyers and investors are looking to cash in on rising tide of foreclosed homes.
Caught in the turmoil of the sub-prime mortgage meltdown, a growing number of banks nationwide are scrambling to dispose of their rising inventories of foreclosed homes. Investors and homebuyers who specialize in the bank-owned properties, known as real-estate-owned, or REOs, are having a field day.
Once a home goes up for auction, a bank typically will send a representative to bid as much as the bank is owed. The lender generally will let it go if they are outbid — since they've then recouped their investment. But if the bank is the highest bidder, the property becomes an REO home.
While there are bargains to be found, REO properties aren't selling far below market value yet. One reason is that bank-owned sales transactions can be more complicated, in part because the sale terms must be approved by the lender or the lender's attorneys. Another reason it is difficult dealing with bank-owned properties is that some lenders are in offices far away from where the loss-mitigation department is struggling to process the listings. And with layoffs occurring within the industry, banks are even more understaffed than before.
Here are a few tips for foreclosure investors and homebuyers seeking bank-owned properties:

• Real estate investing, like any investment strategy, is part of an overall financial plan. Before jumping into buying bank-owned real estate, understand the real estate laws, tax ramifications and other financial issues.
  
• Consult with a tax or financial adviser who can help you assess your financial situation. Get your financial house in order first — that way, you know how much house you can buy.
  
• Don't think that foreclosure investing is easy. For every successful real estate investor, there are countless others who have failed. Make sure you spend time studying the market.
  
• Seek professional help. Hire a real estate agent with foreclosure experience. Look for a mentor who can walk you through your first deal.

The Waller Group Investor Services

Explosive Growth in Texas Investment Buyers

Investors across the globe are purchasing single family rental properties throughout Texas. Texas migration patterns, the strong economy, and lack of financing are driving rents to skyrocket. Rents have increased almost 10% in east Dallas, Uptown and other areas throughout the metroplex. The luxury rental market and the market that previously fell within the range of first time home buyers is now further hollowing out the rental market. The lack of financing available for first time home buyers coupled with distressed sales such as short sales and foreclosures, creates the perfect storm for investor purchases...Another game changer is how residential real estate is now viewed as an asset class by institutional investors and private equity funds. Many funds that have been buying in the sand states, (Florida, Nevada, Arizona and California) are now buying in Texas due to the lack of distressed inventory.
The amount of capital that has been on the sidelines for the last five years in the distressed debt market has created a lot of pent up demand for distressed mortgage debt. A lot of that capital is now being transitioned into the residential single family market. Logan Waller, President of Waller Group Properties and Waller Group Property Management provides services for several hedge funds and many individual investors. “An Australian hedge fund that could purchase anywhere in the world chose to first invest in North Texas. This speaks volumes for our N. Texas Market, we have worked with investors for years since we list properties for most of the major banks and servicers. The difference in the investors over the last year is that they are institutional and high net worth individuals...The investors in years past have been less sophisticated property flippers that were looking for a quick return, usually with unrealistic expectations. They can no longer compete with our institutional investors and high net worth individuals that use our platform of services from acquisition, renovation, accounting, make ready and lease up; providing a true passive investment to the investor. High net worth individuals have the ability to take advantage of the low interest rates through cross collateralizing their assets, allowing them to borrow at almost half the cost of a typical first time home owner.”
 With increasing rents, investors are seeing a 7-14% cash on cash return on their money.  As the stock market becomes more volatile, an income producing investment property that can be purchased for 1/4th of replacement cost is a VERY attractive alternative."


Logan Waller,
Waller Group Properties
214.704.5001
Dallas•Austin•Houston

Homebuyer Interest In Foreclosures Increases In The U.S. #Foreclosures

 

Homebuyer interest in purchasing a foreclosed property more than doubled in the past 2 1/2 years even as the U.S. available inventory shrinks, according to a Realtor.com survey.The share of buyers who say they’re likely to purchase a foreclosed home jumped to almost 65 percent from 25 percent in October 2009,...

 

Homebuyer Interest in Foreclosures Increases in the U.S.

By Prashant Gopal - May 30, 2012 5:00 AM CT

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Homebuyer interest in purchasing a foreclosed property more than doubled in the past 2 1/2 years even as the U.S. available inventory shrinks, according to a Realtor.com survey.
The share of buyers who say they’re likely to purchase a foreclosed home jumped to almost 65 percent from 25 percent in October 2009, according to the telephone poll by Realtor.com, the National Association of Realtors’ website. The survey was conducted this month and the results were released today.
U.S. foreclosure filings fell to a five-year low last month as lenders sought to avoid repossessing properties and a housing recovery showed signs of taking hold, RealtyTrac Inc. reported on May 17. The number of default, auction and seizure notices sent to homeowners dropped 14 percent from a year earlier and was the lowest tally since July 2007.
“Because prices are getting towards the bottom, people see foreclosures as even a greater value because they’re usually priced below market,” Steve Berkowitz, chief executive officer of Campbell, California-based Move Inc. (MOVE), which operates the Realtor.com website, said in a telephone interview.
Home prices in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year. The S&P/Case- Shiller index of property values dropped 2.6 percent from a year earlier following a 3.5 percent decline in February, the group reported yesterday.
Almost 56 percent of respondents in the Realtor.com survey said they are concerned that major lenders will release backlogged foreclosures onto the market and bring down values in their markets.
A “gradually rising foreclosure tide” forecast by Irvine, California-based RealtyTrac after a February settlement by the nation’s biggest mortgage servicers over faulty documentation practices has yet to materialize. Banks have been finding alternatives to seizures, such as approving the sale of distressed properties for less than the amount owed on them.
The Realtor.com survey of 1,004 adults was conducted from May 4 to 6 and has a margin of error of 3 percentage points.
To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Bank Foreclosure info

http://www.reodev.com/property-for-sale/georgia-dallas-30132-251-moriah-ln/  

Foreclosure Discounts

http://www.dallasnews.com/business/residential-real-estate/20120307-foreclosure-discounts-fuel-dallas-home-price-declines.ece      click this link to read more!