Buyer Resources - Foreclosures

Buying Your Home - Foreclosures

Do you have to buy HUD homes through a realty agent?
You can only purchase a U.S. Department of Housing and Urban Development property through a licensed real estate broker. HUD will pay the broker's commission up to 6 percent of the sales price. Roland Bean, Broker is a licensed HUD broker: 315-730-3733

Are foreclosures an option?
A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. At the current time Central New York does not have many foreclosures. It is wise to be cautious when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the house thoroughly inspected and have an attorney to be sure that any liens, undisclosed mortgages or court judgments are cleared or at least disclosed.

How do you find government-repossessed homes?
The U.S. Department of Housing and Urban Development acquires properties from lenders who foreclose on mortgages insured by HUD. These properties are available for sale to both homeowner-occupants and investors. You can only purchase HUD-owned properties through a licensed real estate broker. HUD will pay the broker's commission up to 6 percent of the sales price. Down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from the conventional market's 5 to 20 percent. One caution. HUD homes are sold "as is," meaning limited repairs have been made made but no structural or mechanical warranties are implied.

Can I get a HUD home for as little as $100 down?
If you are strapped for cash and looking for a bargain, you may be able to buy a foreclosure property acquired by the U.S. Department of Housing and Urban Development for as little as $100 down. With HUD foreclosures, down payments vary depending on whether the property is eligible for FHA insurance. If not, payments range from 5 to 20 percent. But when the property is FHA-insured, the down payment can go much lower.  Each offer must be accompanied by an "earnest money" deposit equal to 5 percent of the bid price, not to exceed $2,000 but not less than $500. The U.S. Department of Veterans Affairs also offers foreclosure properties which can be purchased directly from the VA often well below market value and with a down payment amount as low as 2 percent for owner-occupants. Investors may be required to pay up to 10 percent of the purchase price as a down payment. This is because the VA guarantees home loans and often ends up owning the property if the veteran defaults.

If you are interested in purchasing a VA foreclosure, call 1-800-827-1000 to request a current listing. About 100 new properties are listed every two weeks. You should be aware that foreclosure properties are sold "as is," meaning limited repairs have been made but no structural or mechanical warranties are implied.

   

Where do I learn about HUD foreclosures?
One good source is their Web page http://www.hud.gov/.

What are problems buying foreclosures?
Buying a foreclosure is "as is, where is", and generally requires cash, rather than bank financing. It is best to have an attorney check all necessary paperwork, to guarantee a clear title on the property.

What about buying a foreclosure "as is"?
Buying a foreclosure property can be risky, especially for the novice. Usually, you buy a foreclosure property as is, which means there is no warranty implied for the condition of the property (in other words, you can't go back to the seller for repairs). The condition of foreclosure properties is usually not known because an inspection of the interior of the house is not possible before the sale. In addition, there may be problems with the title, though that is something you can check out before the purchase.

How do you get financing for a foreclosure?
One reason there are few bidders at foreclosure sales is that it is next to impossible to get financing for such a property. You generally need to show up with cash and lots of it, or a line of credit with your bank upon which you can draw cashier's checks.

Roland Bean, Licensed R. E. Broker: 315-730-3733

Judy Bean, ABR, Licensed R. E. Agent: 315-406-3881

Roland H. Bean, Lic. R. E. Broker
Roland H. Bean, Lic. R. E. Broker
Judy Bean, ABR, Lic R E Agent
2481 Jugg Street Moravia NY 13118