SW Florida Real Estate Information

With the number of foreclosures available these days it's very tempting to buy these properties, but before you get your feet wet, there are several things to keep in mind.

Buying foreclosures means purchasing a property 'as is' with no guarantee as to its condition.

Before you purchase a property in foreclosure you should do a thorough research prior to signing a sales contract! Purchasing a property without doing your research can result in very unwanted and costly expenses.

So, what are some of the issues that you need to know before signing on the dotted line?

1. Do a Full Title search on the property you are considering. This is one of the most important steps to ensure that the property you are thinking of buying does not have more than one mortgage. When you purchase a property and you have not obtained a title search you may find out after the fact that a second mortgage remains and you will have to resolve this second mortgage before taking possession.

2. Be aware of any other types of liens. Once you purchase the property you can become responsible for those liens and that could translate to large expenses. Doing, a full title search would identify if the property has leans and the cost of the leans. Common liens could be from unpaid taxes or include unpaid contractors or loans borrowed against the property.

3. Repair issues. All though you may find a “Great deal” on purchasing a home in foreclosure you should see the property yourself and get a Home inspection and termite inspection! The ‘Great deal” you found could easily be consumed by repair issues if the home is not in good shape.

4. Proof of funds. All foreclosure properties will require for you to have proof of funds at the time that you submit an offer. If you are financing the property you will need a pre-approval letter from your lender. If you are paying cash you will need a letter from your bank where the funds are stating that you have the money available to purchase the property.

5. How great is the deal? Find out what the other properties in the area are selling for. This is important so that you can set your limit on how much you will pay for the property.

6. Bidding war. The banks typically receive multiple offers on the same property. So it is wise to know exactly how much you are willing to pay for the property and stop bidding if it goes over your limit that you have set for yourself. Also be aware that the sales prices can be over what the listing price is.

7. Be prepared. A foreclosure that is priced to sell will not stay on the market long so be prepared to move quickly. Expect negotiations and the entire process to take longer than if you were buying a home from an individual.

8. The Purchase contract. Banks usually have there own purchase  contracts when buying a foreclosure along with an addendum. PLEASE read and understand the contract fully before you sign it!

Do not assume that you are getting a deal. Do your research!

This information is not intended to give you legal advice it is simply general information to consider when buying a foreclosure.