IF YOU’RE LOOKING FOR A GOOD DEAL ON A HOME IN THE PORTLAND AREA, THE IDEA OF BUYING A FORECLOSURE PROBABLY POPS TO MIND.
It’s true, there are great deals to be had, but you have to be smart.
Six Tips for Buying a Foreclosure in Portland
Here are a few things to keep in mind when you start looking at REO (real estate owned) properties.
Talk to a lender – As with standard home purchases, getting pre-approved for a home loan before you make an offer is always recommended. With recent changes in FHA loans, you may be able to save even more on your home purchase, especially if you’re a first-time buyer.
Be aware of Owner Occupied restrictions – Do you want to live in the home or do you want to use it as an investment? Some bank-owned homes require buyers to submit a statement saying they will occupy the home (or face a fine) rather than rent it out or fix it up and flip it. On some properties you might see, “owner occupied buyer offers only for the first 30 days.” In these instances, the bank only considers offers from buyers who plan to live in the home. If the property doesn’t sell in the specified timeframe, they will then open it up to investors.
Get an inspection – Foreclosed homes may have been poorly maintained. In addition, records about previous damage and repairs are often missing, which means the bank can’t complete a Seller’s Disclosure. If the inspection uncovers serious problems, you may be able to negotiate the deal or walk away. At the very least, you’ll know exactly what you’re getting into so there won’t be any surprises once the sale is complete.
Bid well – REO properties are usually priced to sell, so it’s in your best interest to submit a fair offer rather than low-balling the price. If you’re not sure what a fair bid is, consult a real estate professional who is familiar with the foreclosure market in your area.
Be flexible about your move-in date – Title issues may arise with an REO property which can lengthen the closing process.
Get professional help – A real estate broker who knows the ins and outs of purchasing foreclosed properties can help you anticipate and avoid the normal pitfalls associated with foreclosed properties.
If you’re interested in exploring the foreclosure market in the Portland area, give us a call and we can help you get started.