Question: Bank Owned Homes on Trulia.com

Question: I see homes on Trulia.com that appear to be for sale, but I can't find any information on the properties. They say the information is provided by RealyTrac, but I can't find any more info on their web site unless I pay for it. Where can I get the full information and address?

Answer: The properties that say "Provided by: RealtyTrac" are ALL pre-foreclosure or bank owned. They are not for sale or on the market - yet. If you want the full information on the property you will have to pay for membership with RealtyTrac.com. These listings are really just a form of advertising by RealtyTrac to get people to pay their for their service. If it is bank owned property you are looking for, then it is just a matter of time before it appears on the MLS (it might be several months). ALL bank owned properties are eventually listed on the MLS.

Trulia, Zillow and similar real estate listing sites are notoriously inaccurate and do not have timely information on them. I recommend to all my clients that they not use them because of that. It will just make them frustrated (like you).


Jim

Some Common Questions About Buying a Home

If a person is a first time buyer, what are the best steps to take to become a home owner?
The absolute first step to take is to talk with a mortgage person. There are a few reasons for this. First of all, you want to know where you stand financially in regards to qualifying for a mortgage. You will find out how much of a mortgage you qualify for, and how much you can really afford. Many times a bank will qualify you for more than you are comfortable paying each month. We do not want you to be what we call "house poor", meaning, yes, you now have a home, but you don't have enough money left over after paying the mortgage to enjoy life.

The second reason is that if your credit score is a little low, a good mortgage person will explain how you can improve your score... sometimes dramatically. It does take at least a couple of months for any changes you make to trickle down to your credit score. But it could mean paying a lower interest rate, and therefore have a lower mortgage payment, so the wait may well be worth it.

The last reason is that you cannot make an offer without a mortgage pre-approval. No seller will consider your offer if you can't prove you can pay for it. Also, you don't want to waste your time looking at $300,000 homes if you would only qualify for a $250,000 one.

Is there a different pre-qualification process when you are considering a foreclosed home?
No, the qualification is the same, but you may want to look into an FHA 203K rehab loan. This is a specialized mortgage that gives you extra money above what you are paying for the property that you can use for repairs and upgrades. Many foreclosed properties will need work.

What percentage of the purchase price is usually required?
With an FHA mortgage the minimum down payment is 3 1/2% of the purchase price. You will also need around 2% (roughly depending on the mortgage) for closing costs, but we can almost always get the seller to pay for most of that. The are other loans available through Mass Housing and the VA that have low or even no down payment requirements. Again, it depends on your particular financial situation. There are also matching down payment programs in many cities that I can help you with.

Would all these things apply to a short sale as well?
Everything here also applies to a short sale. The major difference is the length of time needed to close. With a regular home sale, including bank owned properties, the closing is typically 4-7 weeks after the offer is accepted. With a short sale you are looking at a minimum of 8 weeks, with 3 to 4 months more common, and 4 plus months not uncommonly seen. The saving you can make is usually worth the wait.

If you have any questions regarding real estate or financing, please contact Jim Armstrong

Multiple Offer Situations are Everywhere

Multiple offer situations are everywhere.

There are a lot of disappointed buyers out there who think we are in a market where you can offer 10% under asking price on any property. Many properties are selling for over asking price. Each property that a buyer is interested in has to be assessed individually. Of course there are still many homes out there that are still overpriced. You will see seller who think their home is worth more than comparable properties in any market.
Most of the multiple offer situations are bank-owned (REO) properties that have just come on the market. In many cases you have to see the property as soon as it comes on the market and submit an offer right away. There is no waiting until the weekend to see a "hot" property.

When making your offer you need to think about 2 things. The first is how much would this home be worth if it was in perfect condition (take to your REALTOR for help with this), and how much money would it take to do the required work? Take the value of the home and subtract the cost of getting it there and you will have the market value of the home in its current condition. Many bank-owned properties only need paint/paper and minor repairs. You then have to decide how much under (or over) that market value you want to offer.

The second thing you have to think about is how much is the property worth to you? If you like the property but it isn't your ideal home, its not going to be worth as much to you and therefore you may want to submit a lower offer. But when your offer gets beat out by another buyer don't say you wish you made a higher offer. In most cases you only get one chance to make an offer on a bank-owned property, and the highest/best offer will be accepted. Occasionally in a multiple offer situation where all or most of the offers are around the same price the seller (bank) will come back to all buyers and ask for their "final and best offer". This is a form of counter offer where you get a chance to up your offer one last time (or leave it where it is).

Make sure that you have a mortgage pre-approval letter in hand before you make an offer. You will not have time to call up your mortgage person to obtain one, and your offer will not even be considered without it.

You really need to work closely with your REALTOR to successfully get through a multiple offer situation. Even with all these considerations you may still get beat out by another buyer who really, really wants the property. Don't dwell on it...just move on. It happens. Just remember that the price in your offer is the main deciding factor with any seller. Good luck!