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Foreclosure News Update

 

Your Foreclosure Strategy

Foreclosure homes for sale

Why foreclosures?  

Foreclosure property types

Your foreclosure goals 

Your foreclosure strategy

Negotiate foreclosure

Hold or flip foreclosure home?

Fixer upper foreclosures 

Best foreclosure locations

Home neighborhood 

Foreclosure mistakes   

 

Foreclosure procedures 

Foreclosure legal information

Foreclosure law 

Foreclosure glossary 

 

Foreclosure Homes Financing 

Your borrowing strategy

Foreclosure loans 

Creative financing techniques

Home mortgage loan 

  

Foreclosure Inspection, Repair, Improvement, and Decoration Tips

Home inspection 

Home appraisal

Foreclosure repair 

Home improvement 

Home remodeling 

Home decoration 

Home design 

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Foreclosure Opportunities Newsletters

 

Foreclosure Home Repair Strategy

 

Negotiation Tips for Buying Home

 

Four Common Mistakes in Getting Home Mortgage Loans

 

Foreclosure Fixer-Upper Homes

 

Foreclosure Process: Best Time to Get in

 

Pre-foreclosure Opportunities: How to Locate Them

 

Estimating Foreclosure Fixer-Upper Repair Costs

 

Home Buying/Selling, and Renting/Leasing Tips

Home buying 

Lease-buy option 

Home buying and selling news

Home for sale 

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Title search and title insurance

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Avoid Serious Common Mistakes in Buying Foreclosures

Don't risk your most valuable investment: A thorough professional inspection is a must

Home inspection before buying a foreclosure property enables you to:

  • Assess the home’s physical condition: structure, condition and mechanical systems.

  • Find out items that need repair or replacement.

  • Estimate the remaining useful life of major systems, appliances, structure, and finishes.

Coverage of  professional home inspection

  • Structural components

  • Exterior condition

  • Roofing, chimney, and gutters

  • Water supply and plumbing system

  • Electrical system

  • Heating, cooling, and ventilation systems

  • Interior walls, floors, windows, appliances, equipment, and carpets

 

Your right to inspect the property is one of your biggest advantages in determining the best price, negotiating that price, and other terms. The seller will be more willing to give in at this stage since everybody is half way through the process if you are buying it at a pre-foreclosure stage.

 

Fortunately, most home inspections reveal problems that you and even the seller may not know. The seller may feel embarrassed about some problems that he or she did not disclose. It is a legal obligation of the seller in practically all states to disclose defects and malfunctioning or missing items on the property.

Home inspection is a powerful negotiation tool

  • Make a list of all inspection results. Emphasize that the inspector is an objective third-party.

  • Ask the seller to fix the problems. Let the seller think about doing it in weeks or months with all those out-of-pocket expenses. Let him or her feel the difficulty of doing it.

  • Get the costs for a professional to fix it up. Ask seller if he or she is willing and can afford to fix it up. If he or she says “Yes,” then ask whether he or she has done it in the past. If you still receive a “Yes” answer, say that you expect a professional job.

  • Add all financing costs and lost rent as additional expenses.

  • Explain how much time, effort, and money you would need to do it all.

  • Let him or her compare the different courses of action and feel how comfortable it would be to sell the property “as is.”

You need professional inspection to estimate the repair costs of fixing up the foreclosure property to determine whether you should buy the property.

Setting up your negotiation strategy in making your offer

  • Their property is in a worse condition than they know.

  • Fixing it up will be costly.

  • Cost of the material and labor are higher than before

  • It takes too much time to do it.

  • They can reduce the price, make a quick sale, and let somebody else take care of it.

Keep the center of negotiations on the property, not on the person. Ask him or her not to take this personally.

 

Review some negotiation tips for buying and set up your strategy before making your initial offer.

 

Take extra precautions: Ask your real estate agent to include a contingency clause, making your purchase subject to an additional inspection before the closing. This gives you an upper hand to request additional deductions in price or allowances at settlement.

How to design your home inspection contingency

You should also ask for clean property at the time of settlement. If you find dirt, debris, or any other junk inside or outside the house during a walk-through inspection before the settlement, then you are entitled to ask for compensation.

 

Remember: every constingency you can introduce strengthens your position.

 

Inspection contingencies may take several forms with the home inspection contingency being the most common. Other inspection contingencies are:

  • Approval of your partners, relatives, company, or an agency.

  • Inspection by your own contractor, handyman, or other professional (electrician or plumber).

  • Any other contingency that you may think of.

About the Author: John Anderson worked as real estate agent, Realtor® in Florida and Virginia and publishes foreclosure newsletters on bank and government owned foreclosures.

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