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Buyers Due Diligence when buying a bank owned foreclosure
Do your due diligence when making an offer on a bank owned property. Everything should be taken care of by your agent, bank and title company. Sometimes you never know, somethings might fall through the cracks.
Here are a few things to check on
- Get a property inspection, enough said.
- Make sure to follow up with the city on Truth In Housing requirements. Some cities don’t have Truth In Housing.
- Contact the city for current tax and assessment information.
- Make sure no squatters or renters are occupying the property. (It happens, I’ve heard stories)
- Is there a well or septic tank on the property? Verify with county or city regarding requirements.
- Check with the homeowners’ association, if there is one, to see if there are any delinquent dues, transfer fees and any assessments.
- Call the city and county to find out about any assessments for unpaid utilities, sewer and water bills.
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Foreclosures and Short Sales in the Twin Cities Update
Foreclosures and short sales in the Twin Cities accounted for 34.1% of the closed transactions in quarter three according to a report published by the Minneapolis Association of Realtors.
Lenders are seemingly discounting properties at steep prices to get rid of them and thus dragging down prices even further.
The foreclosures and short sales are starting to move into the upper bracket section of the market as well. Now prime mortgages are starting to feel the affect. Foreclosures increased from 166 to units to 207 in the $500k-1mil price range, a 24.3% increase. For homes that are over a $1 million, foreclosures increased by 81.3%.
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Lender Foreclosure Auction coming back to Minneapolis November 15 & 16
Back again is another lender foreclosure auction on November 15th & 16th at the Minneapolis Convention Center. Public open houses are on 12pm -4pm on Novermber 1st, 8th and 9th. Bring your inspectors for your pre-inspections because once the gavel drops, it’s official!
Don’t know where the convention center is, get directions here.
Let me know if you are going, we can meet up!
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Search bank foreclosures now available
Now available on this site is a new foreclosure search that allows you to search foreclosures. I have gone through and created links to individual cities for a hyper local search or you can start your own REO search.
What makes this so good is the optimized map search that is blazing fast by Diverse Solutions. Well, that’s not the only thing that makes this so good. Get neighborhood information if you unfamiliar with the area, see what kind of local amenities are nearby.
Create an account for free to save your searches for review later. If you like RSS feeds, subscribe to new listings via a RSS feed. A wide variety of tools are available in the search as well such as mortgage calculators, school info and your very own Zestimate from Zillow.
Having trouble finding what you are looking, chat with us in real time when it is available via the live chat feature located at the top of the search box. So there you go, knock yourself out and happy REO hunting!
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What did it sell for at the Sherrif’s Sale
For whatever it is worth, below is a list of links to find history on homes or bank foreclosures that sold straight from Sheriff’s office. You won’t find any information of upcoming sales, Minnesota State law requires the attorney’s office who represent the lender in the foreclosure proceedings must publish the sale in a legal newspaper for 5 weeks.
Hennepin County Sheriff’s Sale
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Find HUD homes in Minnesota
You here some people talk about HUD homes, just like REO properties these are homes that have been foreclosed on and are listed for sale. Except the home is not owned by the lender, it is controlled by HUD.
Sometimes the Department of Housing and Urban Development takes control of homes once the lender forecloses on the property. These homes are then usually listed for sale or put up at an auction. Home buyers that are interested in buying HUD homes can usually receive seller concessions from HUD if they use an FHA insured mortgage.
Where to find them
A lot of websites claim to have a list of HUD homes, but the best place to find them are on the Housing and Urban Development website. Here you can search single family homes or Multi Family properties from HUD all the way to Fannie Mae and Freddie Mac REO properties.
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Finding Mortgage Information…
Who is the mortgage with
One of the first things I hear from people when looking into a REO or foreclosure property is who has the current mortgage. Being, what lender has the mortgage. I think most people think they might get a better deal if they know who the mortgage is with, given there current financial situation on Wall Street.
Truth of the matter is, it doesn’t matter. Good luck trying to find it if you are looking for it. Mortgage information is not public information unless you can find it in the legal publication where the lender published the information to initiate the foreclosure process which runs five weeks.
I think most people think they can buy the property at whatever is left on the mortgage and to be honest, banks will not do that. They will try to sell the property at market value and are definitely not going to part with leaving equity in the property.
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Know the Market of REO and Foreclosures
With so many REO properties on the market, it can sometimes be a difficult task to figure out if the property is a solid buy. Different areas around the Twin Cities have higher concentrated pockets of foreclosures.
One of the first things involved in purchasing a REO property is knowing the market. By not understanding the current market, it can really derail your successful purchase when it is all said and done.
What is happening
Look for trends in the market around the area that you are looking in. Get a market analysis done on the property with the current solds and pending properties. A sufficient number of comparables would be three in the immediate area. Determine if the property is in a declining area or if the market is steady.
What is does the growth of the area look like? Is there any development going on in the immediate area? All good things to look for when looking into the immediate market area.
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Apple Valley REO & Foreclosure Update
Here is a market update for Apple Valley REO and Foreclosure listings.
Active Listings
- Currently there are 67 listings on the MLS in Apple Valley that are REO
- Of those 67 Listings, 36 are single family homes
- 2 condos in Apple Valley are REO
- 29 townhomes are REO
- Prices range from $64,900 to $499,900
Listings Sold
Four listings sold have sold in Apple Valley during the month of September that were REO. Two single family homes and two townhomes.
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Get a home warranty on a REO or Foreclosure
So what is the big deal…
Having a home warranty on a REO property is a good idea. Unless you are buying the property with the thoughts of tearing everything apart, then maybe not so much. With all the bank owned listings around here, who knows what the previous owner did to the house as it was going through foreclosure, most people just don’t care and they quit with the basic upkeep of the house.
Most REO properties sit vacant for some time and it is hard to tell what will really work or not. You purchase the property ‘As Is’ from the bank, so having a home warranty will take some of the stress out of the purchase of the house.
Different home warranties offer different coverage and services. Most home warranties run for a year with the opportunity to extend the warranty as the first year goes on. The services covered range from basic to extensive. It is important to point out that not all things in the home are covered. Most system components along with appliances are covered with optional add ons depending on the company.
Put the $$$ down
Not so fast, ever thought about having the bank pay for it? If they want to sell the home they will pay for it, but you never know without asking. Make sure to include it in the initial purchase agreement.
Having a home warranty will definitely protect your investment against any breakdowns on covered items.
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