| Considering a distressed property, whether you are | | | | to be closed by title companies. If this is true in your |
| looking at a short sale, REO, Fannie Mae or Freddie | | | | part of the country, you should get to know |
| Mac, or other bank-owned property, here are 5 key | | | | someone at a local title company. If you are |
| things you need to consider. | | | | borrowing money to purchase the property, your |
| When looking at properties now days, you need to | | | | lender may specify which title company they want |
| really be wary of a deal that looks like it might be | | | | you to use. Realize that as a party to the |
| too good to be true. With so many distressed | | | | transaction, it is often up to you, who you want to |
| properties on the market, there are certain things | | | | close the deal. Having a great title company that you |
| you must keep in mind and do, in order to get what | | | | can call to ask questions has been one of the keys |
| you really want in a property. | | | | to my real estate investing success. |
| 1. Find out everything you can about the property | | | | 4. Make a smart offer |
| Investigate and find out everything you can about | | | | More and more, it is becoming important to make |
| the condition of the property. Ask a lot of questions | | | | your best offer on a property right from the |
| concerning the condition of the home and title to the | | | | beginning. Just this week a client of mine made what |
| property. The age and location of the property will | | | | we thought was a good offer on a Fannie Mae |
| dictate some of the questions you need to ask and | | | | property. He lost the property to another bidder for |
| get answers to. | | | | just $2000. It turns out there were 4 others offers |
| Do not be cheap and forego the Home Inspection. It | | | | on this property. Had we known, he would have |
| will probably cost you between $300 and $500, but | | | | made his best offer and be moving into his dream |
| that is money well spent if it uncovers an otherwise | | | | home. But, since he did not get a chance to |
| hidden problem with the property or provides you | | | | counter-offer or change his offer, we will just have |
| with the peace of mind you are seeking before | | | | to keep looking for him a new home. Big lesson |
| making one of the biggest purchases of your life. | | | | learned. Make your best offer if there might be other |
| 2. Find out what the property is worth | | | | bidders on a property-especially a distressed |
| Make sure you look into what the property is really | | | | property. |
| worth in today's real estate market. Not what the | | | | 5. Know what the seller's requirements are and meet |
| seller is asking for the property, not what the 2 year | | | | them |
| old appraisal says the property is worth. Get some | | | | Whenever you are involved in a distressed property |
| comparable sales, check tax records, find out what | | | | situation, you need to find out what the sellers |
| similar properties are being offered for sale are | | | | requirements are. In the case of a short sale, the |
| asking. If you can, get the opinion of a couple of real | | | | seller and his/her lender(s) requirements need to be |
| estate professionals (agents, brokers, appraisers, | | | | taken into consideration and followed. These |
| lenders) in the area. | | | | requirements change often and without warning or |
| 3. Get the right people on your team | | | | notification. Any one of them that is not followed |
| You need to make sure you have the right people | | | | exactly, is enough to kill your deal and keep you |
| on your side when it comes to buying a distressed | | | | from getting the property. Authorizations, financial |
| property. | | | | documents, contracts, and other information has to |
| Experience Realtor/Broker - Whether the property | | | | be submitted according to the lenders guidelines. |
| requires a discount because it is a short sale, REO, | | | | Bonus Tip: Be patient or be willing to walk away. |
| bank owned property, or foreclosure, you have got | | | | Do not fall so in love with a distressed property that |
| to have a real estate professional who has real | | | | you are not willing to call it quits and walk away if |
| experience dealing with that type of transaction. | | | | things do not go according to plan. If you discover a |
| They need to have successfully negotiated and | | | | problem with the property or the title, if your realtor |
| closed several similar properties. | | | | just can't get the deal negotiated to your |
| Lender-Your lender, if you need to secure financing | | | | satisfaction, if your lender will not fund the deal at a |
| for a distressed property is very important. They | | | | decent interest rate, if the whole process is taking |
| need to be knowledgeable and flexible in their | | | | too long (and I mean over six months), you have to |
| approach to funding the deal. | | | | be willing to throw in the towel and find something |
| Attorney-You may need a lawyer to look over and | | | | else. |
| explain all the legal documents to you. If most real | | | | There are terrific deals to be found in today's |
| estate transactions in your area are settled or closed | | | | distressed real estate market, but there is a price to |
| by attorneys, you may need to find one in order to | | | | pay in terms of extra effort, research, and time. |
| get the deal done. | | | | Somebody always pays. |
| Closing/Title Company-In many parts of the country, | | | | That's my two-cents worth. Make it a great day! |
| it is usual and customary for real estate transactions | | | | |