The number of foreclosures has escalated since 2007, and the high volumes are expected to continue for the foreseeable future as the troubled economy continues to bite, and mortgages become difficult for owners to pay. Also, increasing numbers of homeowners are deliberately defaulting on their mortgages and "walking away" because the home value is significantly less than the amount of the mortgage, and they see no hope of recovery.

Earlier moves by the government intended to head off foreclosures have been largely ineffective, and apply only to certain types of mortgage (for more information on this, see my blog post Government Assistance for Homeowners). At this stage, those proposals have failed to help many troubled borrowers.

The significance of foreclosures in the market is two-fold:-

• currently foreclosure sales are running at more than 50% of total home sales in Warren County, VA
• the very nature of foreclosures pushes prices down, and can have the effect of devaluing a neighborhood generally

Foreclosures can provide a great deal for the right buyer :-

• banks don't want to be property managers - most will price a foreclosure to get it sold, which will often mean a price below the "typical" market level seen among similar homes that have sold recently
• as a result, you may be able to purchase a nicer home than you might otherwise have expected
• some foreclosures have little or no work required on them, or maybe only cosmetic items that can be easily addressed by most home owners with minimal cost and a little elbow grease
• other foreclosures may require more substantial work, but are priced at such a significant discount to the market that they offer the chance of a nice capital profit to the buyer who is capable of dealing with the issues
• foreclosure purchases are fully eligible for the current Home Buyer Tax Credits. (But note that these credits are no longer available unless you have a contract in place, ratified by April 30, 2010, and then close by June 30, 2010.

Set against the benefits, there are some issues that you need to be fully aware of :-

• you are buying strictly "as-is". Most selling banks allow home inspections "for information only" after ratifying a contract, but some insist that your offer is a full "clean" commitment to buy. Either way, there are no come-backs after you buy
• the condition of a foreclosure is often (but not always) poor. If people weren't paying their mortgage, chances are they weren't looking after the home either. Common features are trashed flooring, appliances and light fixtures removed, damaged dry wall, badly done home projects, etc
• the condition of the foreclosure property may affect its eligibility under some mortgage finance, especially government-supported schemes like FHA, VHDA, USDA, and VA. This relates particularly to major code issues and certain "habitability" issues, where required work must be addressed before settlement and in most cases will not be completed by the selling bank
• many selling banks will insist that the buyer pays certain closing costs that would normally be paid by the seller. Examples are grantor's tax, and the regular tests for water, termite, and septic walkover
• not all foreclosures are a bargain. Some come to the market priced far too high, and are NOT good value. Don't assume that because it is a foreclosure, it must be a "deal"
• foreclosures that are priced "right" often generate competing multiple offers, resulting in a request for the buyer to present their "highest and best" offer
• most foreclosure banks respond to offers fairly quickly these days, but there are some that can take a while. As a buyer you may have to be patient, and understand that while you are waiting, other offers may come in and trump yours

If you're aware of the reservations set out above, and remain interested . . .

• unless you will be paying cash, you need to be pre-qualified for your mortgage finance. When you find a foreclosed home that you wish to make an offer on, you will need to move fast, and no bank will accept an offer from a buyer who is not pre-qualified.
  
  I can help you with this, but it must be #1 priority.


(Note also that some selling banks will insist that you are pre-qualified through one of their own branches or loan officers. That would not obligate you to take out the mortgage through them, but they would not consider your offer without their own pre-qualification)
• email me or call (540) 671-1367 for an up-to-date list of foreclosed properties in the area
• I am happy to go through the buying process with you, and explain how this differs from the purchase of a "regular" sale
• I am happy to work with qualified buyers in all price ranges
• Let me know how I can help you!

The number of foreclosures has escalated since 2007, and the high volumes are expected to continue for the foreseeable future as the troubled economy continues to bite, and mortgages become difficult for owners to pay. Also, increasing numbers of homeowners are deliberately defaulting on their mortgages and "walking away" because the home value is significantly less than the amount of the mortgage, and they see no hope of recovery.

Earlier moves by the government intended to head off foreclosures have been largely ineffective, and apply only to certain types of mortgage (for more information on this, see my blog post Government Assistance for Homeowners). At this stage, those proposals have failed to help many troubled borrowers.

The significance of foreclosures in the market is two-fold:-

• currently foreclosure sales are running at more than 50% of total home sales in Warren County, VA
• the very nature of foreclosures pushes prices down, and can have the effect of devaluing a neighborhood generally

Foreclosures can provide a great deal for the right buyer :-

• banks don't want to be property managers - most will price a foreclosure to get it sold, which will often mean a price below the "typical" market level seen among similar homes that have sold recently
• as a result, you may be able to purchase a nicer home than you might otherwise have expected
• some foreclosures have little or no work required on them, or maybe only cosmetic items that can be easily addressed by most home owners with minimal cost and a little elbow grease
• other foreclosures may require more substantial work, but are priced at such a significant discount to the market that they offer the chance of a nice capital profit to the buyer who is capable of dealing with the issues
• foreclosure purchases are fully eligible for the current Home Buyer Tax Credits. (But note that these credits are no longer available unless you have a contract in place, ratified by April 30, 2010, and then close by June 30, 2010.

Set against the benefits, there are some issues that you need to be fully aware of :-

• you are buying strictly "as-is". Most selling banks allow home inspections "for information only" after ratifying a contract, but some insist that your offer is a full "clean" commitment to buy. Either way, there are no come-backs after you buy
• the condition of a foreclosure is often (but not always) poor. If people weren't paying their mortgage, chances are they weren't looking after the home either. Common features are trashed flooring, appliances and light fixtures removed, damaged dry wall, badly done home projects, etc
• the condition of the foreclosure property may affect its eligibility under some mortgage finance, especially government-supported schemes like FHA, VHDA, USDA, and VA. This relates particularly to major code issues and certain "habitability" issues, where required work must be addressed before settlement and in most cases will not be completed by the selling bank
• many selling banks will insist that the buyer pays certain closing costs that would normally be paid by the seller. Examples are grantor's tax, and the regular tests for water, termite, and septic walkover
• not all foreclosures are a bargain. Some come to the market priced far too high, and are NOT good value. Don't assume that because it is a foreclosure, it must be a "deal"
• foreclosures that are priced "right" often generate competing multiple offers, resulting in a request for the buyer to present their "highest and best" offer
• most foreclosure banks respond to offers fairly quickly these days, but there are some that can take a while. As a buyer you may have to be patient, and understand that while you are waiting, other offers may come in and trump yours

If you're aware of the reservations set out above, and remain interested . . .

• unless you will be paying cash, you need to be pre-qualified for your mortgage finance. When you find a foreclosed home that you wish to make an offer on, you will need to move fast, and no bank will accept an offer from a buyer who is not pre-qualified.
  
  I can help you with this, but it must be #1 priority.


(Note also that some selling banks will insist that you are pre-qualified through one of their own branches or loan officers. That would not obligate you to take out the mortgage through them, but they would not consider your offer without their own pre-qualification)
• email me or call (540) 671-1367 for an up-to-date list of foreclosed properties in the area
• I am happy to go through the buying process with you, and explain how this differs from the purchase of a "regular" sale
• I am happy to work with qualified buyers in all price ranges
• Let me know how I can help you!

The number of foreclosures has escalated since 2007, and the high volumes are expected to continue for the foreseeable future as the troubled economy continues to bite, and mortgages become difficult for owners to pay. Also, increasing numbers of homeowners are deliberately defaulting on their mortgages and "walking away" because the home value is significantly less than the amount of the mortgage, and they see no hope of recovery.

Earlier moves by the government intended to head off foreclosures have been largely ineffective, and apply only to certain types of mortgage (for more information on this, see my blog post Government Assistance for Homeowners). At this stage, those proposals have failed to help many troubled borrowers.

The significance of foreclosures in the market is two-fold:-

• currently foreclosure sales are running at more than 50% of total home sales in Warren County, VA
• the very nature of foreclosures pushes prices down, and can have the effect of devaluing a neighborhood generally

Foreclosures can provide a great deal for the right buyer :-

• banks don't want to be property managers - most will price a foreclosure to get it sold, which will often mean a price below the "typical" market level seen among similar homes that have sold recently
• as a result, you may be able to purchase a nicer home than you might otherwise have expected
• some foreclosures have little or no work required on them, or maybe only cosmetic items that can be easily addressed by most home owners with minimal cost and a little elbow grease
• other foreclosures may require more substantial work, but are priced at such a significant discount to the market that they offer the chance of a nice capital profit to the buyer who is capable of dealing with the issues
• foreclosure purchases are fully eligible for the current Home Buyer Tax Credits. (But note that these credits are no longer available unless you have a contract in place, ratified by April 30, 2010, and then close by June 30, 2010.

Set against the benefits, there are some issues that you need to be fully aware of :-

• you are buying strictly "as-is". Most selling banks allow home inspections "for information only" after ratifying a contract, but some insist that your offer is a full "clean" commitment to buy. Either way, there are no come-backs after you buy
• the condition of a foreclosure is often (but not always) poor. If people weren't paying their mortgage, chances are they weren't looking after the home either. Common features are trashed flooring, appliances and light fixtures removed, damaged dry wall, badly done home projects, etc
• the condition of the foreclosure property may affect its eligibility under some mortgage finance, especially government-supported schemes like FHA, VHDA, USDA, and VA. This relates particularly to major code issues and certain "habitability" issues, where required work must be addressed before settlement and in most cases will not be completed by the selling bank
• many selling banks will insist that the buyer pays certain closing costs that would normally be paid by the seller. Examples are grantor's tax, and the regular tests for water, termite, and septic walkover
• not all foreclosures are a bargain. Some come to the market priced far too high, and are NOT good value. Don't assume that because it is a foreclosure, it must be a "deal"
• foreclosures that are priced "right" often generate competing multiple offers, resulting in a request for the buyer to present their "highest and best" offer
• most foreclosure banks respond to offers fairly quickly these days, but there are some that can take a while. As a buyer you may have to be patient, and understand that while you are waiting, other offers may come in and trump yours

If you're aware of the reservations set out above, and remain interested . . .

• unless you will be paying cash, you need to be pre-qualified for your mortgage finance. When you find a foreclosed home that you wish to make an offer on, you will need to move fast, and no bank will accept an offer from a buyer who is not pre-qualified.
  
  I can help you with this, but it must be #1 priority.


(Note also that some selling banks will insist that you are pre-qualified through one of their own branches or loan officers. That would not obligate you to take out the mortgage through them, but they would not consider your offer without their own pre-qualification)
• email me or call (540) 671-1367 for an up-to-date list of foreclosed properties in the area
• I am happy to go through the buying process with you, and explain how this differs from the purchase of a "regular" sale
• I am happy to work with qualified buyers in all price ranges
• Let me know how I can help you!