Afonso Real Estate



Posted by Afonso Real Estate on 12/13/2017

Have you heard a lot about HUD homes, but arenít sure if you should buy one or what the process entails?  HUD stands for The Department Of Housing And Urban Development. The FHA (Federal Housing Administration) is a part of HUD. The FHA is where federal mortgage insurance comes from. If a home is foreclosed on and insured by the FHA, the lender has a right to file a claim for the balance due on the mortgage. The FHA will pay this claim, and then transfer the ownership of the property to the HUD who will sell the home.


Will A HUD Home Provide A Price Break? 


The answer to this question is not necessarily. A HUD home is appraised just like any other home for sale. The price is based on the fair market value of the home. The prices may be adjusted according to any repairs that need to be made to the home. Itís a good idea to have your realtor look into comparable prices for HUD homes, as these properties arenít guaranteed to be a deal.


Know that HUD homes are sold as-is. There isnít much negotiating like that of a typical home purchase. As the new owner, youíll be responsible for all of the repairs. Itís a good idea to invest in a home inspection before you buy a HUD home for this reason. Youíll have a better understanding of what youíre getting into with this type of home purchase. 


How Do You Begin The Search For A HUD Home?


Housing and Urban Development homes are listed by state on the departmentís website. This is a good place to start your search. The site also lists brokers who are approved by the HUD. You can then contact local brokers to show you the HUD properties that youíre interested in.


The Process Of Making An Offer


Buying a HUD property can be very different than buying any other type of home in that the offer process is a bit different. These properties are sold through bids. You must hire a licensed real estate agent to assist you in this process, you canít just put a bid in on your own. Youíll need to be sure that your offer is placed during the designated offer period. Either the highest bid is accepted or the bid that came in first in order will be taken. Generally, the HUD wants to take the offer that will get them the most profit.


Careful With Financing


The HUD does not finance homes. Youíll need to apply for a mortgage just as you would in buying any other home. Before you can even make an offer on a home you must have approved financing. If for some reason you get through the process of having your offer accepted on the home and the financing falls through, thereís a chance that you could lose your earnest money deposit.     

     





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Posted by Afonso Real Estate on 5/18/2016

If you are looking for a deal you may be thinking about buying a foreclosure but buyer beware. There is a lot to know before putting an offer in on a foreclosed property. Often foreclosures are sold "as is" and many times do not have a seller disclosure available for review. This makes it even more important to get a thorough home inspection. Here are some†issues to be aware of commonly found with foreclosures and not usually seen with the naked eye.

  • Roof damage
  • Damaged appliances
  • Damaged or missing plumbing
  • Faulty electrical systems and components
  • HVAC system problems
  • Conducive termite conditions
  • Water penetration and damage issues
  • Interior structural damage
A home inspection is essential not only to identify problems with the home but to also get a more realistic picture of the things that need to be repaired to make the home livable.





Posted by Afonso Real Estate on 7/9/2014

Many buyers today think buying a foreclosure means big savings and this can be true but buyers also need to be aware of potential pitfalls. A foreclosure takes place when a homeowner or property owner cannot pay the mortgage fees on the property and is forced to give up the property to the bank. First, potential buyers should know there are different stages of foreclosure.
  • Pre-Foreclosure
Pre-foreclosure stage is the earliest stage of foreclosure. Reaching pre-foreclosure status begins when the lender files a default notice on the property, which informs the property owner that the lender will proceed with pursuing legal action if the debt is not taken care of. At this point, the property owner has the opportunity to pay off the outstanding debt or sell the property before it is foreclosed. In this stage, many homeowners may opt for what is called a short sale. Many of these homes will sell for near their appraised values. Banks may be willing to negotiate on these properties but the process can be lengthy. Properties that sell at a 20 to 40 percent discount usually need repair or are in unstable communities.
  • Foreclosure Stage
If a property doesn't sell in pre-foreclosure, and the home owner actually defaults on his mortgage, the home goes to public auction. During this stage you can find the best bargains but it can be filled with unexpected changes and last minute details. Preparation, patience and knowledge are key here and remember if a property does go to auction it will go to the highest bidder which is often the bank.
  • Many auctions are canceled at the last moment as the property has been sold or payments reworked.
  • Court-appointed trustees only accept cash or cashiers' checks.
  • There's little time to arrange inspections, so bidders may have no clear idea of what they're buying.
  • Properties are sold "as is," without warranties. Sellers needn't disclose problems. Buyers may find themselves with unexpected and expensive repairs.
  • Post-Foreclosure
  • In the post-foreclosure stage, the lender has already taken control of the property. The home is then in the possession of the lender's REO (Real Estate Owned) department, or in the hands of a new owner or investor who purchased the property at auction. Lenders are typically extremely willing sellers, because an REO on the books is an obvious sign of having made a poor lending decision. Both the overhead and losses involved with an REO -- reflected in both the added reserves a lender must maintain as well as any potential property management fees incurred -- means the bank is likely a willing negotiator.
    • Bank will not agree to do any repairs; as-is sale.
    • Bank will usually require additional paperwork.
    • Bank cannot provide disclosures as to property history/condition issues.
    Bank foreclosure properties can definitely help you make a good buy in real estate properties and still have lots of savings. Doing your homework on the neighborhood, comparable sales and property condition are essential in making a good buying decision.







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