Advantages Of Buying Foreclosed Property

Tax Advantages - The American Recovery and Reinvestment Act of 2009 authorizes a tax credit of up to $8,000 for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009.

Built-In Appreciation - While not true in all cases, some foreclosed homes are liquidated at prices well below market value in order for the mortgagee to clear the toxic loan off its books. This can potentially result in built-in appreciation that make such a property very attractive to both homeowners and investors.

More Home For Less - Buying the right foreclosed home can sometimes mean owning a bigger home, or one with more bedrooms and baths or amenities, for the same price as a smaller home.

Even so, if all of the factors seem to be in your favor, buying a foreclosed home is filled with risks not normally associated with a normal real estate transaction. When you buy can be just as important as what you buy or how much you pay. The three most common circumstances under which foreclosed properties are purchased are: Preforeclosure, Foreclosure Auctions and Real Estate Owned (REO or "bank-owned").

Knowing which of these is right for you may involve your temperament, willingness to take risk, financial position or the urgency with which the transaction needs to be conducted. We can help.

Interest rates and home prices are the lowest they have been in years; do not miss this window of opportunity.

How To Buy Foreclosures

First - You have to locate them. See our foreclosed property listings.

Second - Look at the total amount owed. We can help.

Third - Make sure that there are no other liens or loans against the property. This can be tricky, if you don't know how to do the research. We can help.

Fourth - What are the required terms of the sale? Will you need to be pre-approved, is it a "cash only" sale or is there financing available? We can help.

Finally - Understand where the property is in the foreclosure process. Is the property in Pre-foreclosure? Has it already gone auction, but has come back unsold and is now bank-owned? We can help.

How Much Can You Afford? Preapproved Versus Prequalified

What's your price range? Unless you have an unlimited supply of cash, you will probably be financing the transaction. The best way to determine your price range is to be preapproved by a lender before getting into the serious aspects of a purchase. We can help.

Don't confuse "preapproved" with "prequalified." Prequalified means a loan officer has determined a borrower is credit worthy and financially able to qualify for a particular type of loan, but has not yet specified the loan amount. Preapproved means that the lender has determined how much they are willing to lend to the borrower.

Some of the advantages of Loan Preapproval include:

• Saving time because you'll be looking only at the houses for sale you can afford.
• Having more time to inspect the homes you're interested because you know you're looking at houses in your price range
• Avoiding disappointment over falling in love with a home, only to discover that it's outside your budget.
• Gaining greater negotiating power with the seller by being able to close faster.

Where Do You Want To Live In Monterey County?

Are you new to the area, or not exactly sure about the neighborhood where your foreclosed home is located? Purchasing a foreclosed home is a good choice only if you and your family are happy living there. Beyond the possibility of getting a good deal, the buying decision still involves all of the considerations that are important when purchasing any home. These may include: zoning issues, future development, access to schools, shopping and major highways, property taxes and noise pollution and safety, just name a few.

Talk To An Expert

Choose an agent with the experience you're looking for. You'll want someone who knows not only real estate and the local market, but also someone who can help you avoid the uncommon risks that come from purchasing a foreclosed property. We can help.

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