Saturday, June 13, 2009

New Ways to use the $8,000 tax credit for your down payment in Ohio!!

OHFA is now changing the program to allow assistance help. How the program works is there will be 2 mortgages set up. 1 with the loan amount and the 2nd loan will be 3% of the loan amount not be due until August 2010! By August of 2010 you will have your $8,000 tax credit to pay this loan off. Now all the first time homebuyers will need is .5% of the purchase price (example: loan amount $100,000, .5% would be $500 down) $500 is typically what your earnest money deposit is! Now is the time to buy! Don’t miss your chance to own a home with this opportunity.

Here is how the program works:

Let OHFA help you with down payment and closing costs through the Homebuyer Tax Credit Advantage Program featuring no interest and no loan payments until August 2010. Eligible borrowers participating in the First-Time Homebuyer Program or Ohio Heroes Program can use the loan to greatly reduce the out-of-pocket expenses associated with buying a home.

If you qualify for one of OHFA’s home loan programs, you can choose to take advantage of the Homebuyer Tax Credit Advantage Program.

•OHFA will issue a loan, as a second mortgage, up to 3% of the purchase price of the home.
•You can use the loan to pay for the down payment, closing costs, or other prepaid expenses incurred prior to closing. Keep in mind that while the loan will greatly reduce your expenses, you may still be required to pay for some costs if they are not covered by the loan.
•If you take advantage of the loan, your second mortgage interest rate will be fixed at 1% higher than OHFA’s current mortgage rates and you will begin paying August 1, 2010.
•You may be eligible for a new federal First-Time Homebuyer Tax Credit of up to $8,000. You may claim the credit either on your 2008 federal tax return, due April 15, 2009, or on your 2009 tax return filed in 2010. More information about the First-Time Homebuyer Tax Credit is available from the IRS web site.
•Incentives are available if you choose to prepay the Homebuyer Tax Credit Advantage loan by June 30, 2010. Otherwise, your mortgage payment will increase slightly due to the added second mortgage loan payment.
Do I Qualify?
To qualify for the Homebuyer Tax Credit Advantage Program, you must meet all requirements for your OHFA homeownership loan program and close on the home by November 30, 2009. You may also want to claim the federal tax credit of up to $8,000 on either your 2008 federal tax return, due April 15, 2009, or on your 2009 tax return filed in 2010. Check requirements for the First-Time Homebuyer Program and Ohio Heroes Program.

In addition, you must either:

•Complete a free homebuyer education course offered by any HUD-approved housing counseling agency, or
•Use the streamlined OHFA homebuyer education program
Call Molly Hay for additional information: 614.581.2086

Understand the steps to buying a HUD home with $100 down

Things You’ll Need:
•Pre-approval
•Hud Authorized Realtor - Call Molly Hay for details. 614.581.2086
•Earnest money
1.Step 1

Find a loan officer, bank or credit union, to have them go over your credit and get a pre-approval.

2.Step 2

Have your loan officer fax a copy of your pre-approval to your Realtor. For this program you must be approved for a Fha loan. Make sure you give your Realtor your loan officer’s name and phone number.

3.Step 3

Find a Hud authorized Realtor - Call Molly Hay for details. If you have not done the previous steps, your hud authorized Realtor can help you find a loan officer.

4.Step 4

Now that your Realtor have your pre-approval, you will know exactly how much of a home you can afford. Never go out to see homes with out this pre-approval, it is nothing like falling in love with a home and to find out later that it is not in your price range.

5.Step 5

Ask your realtor to email you HUDS in the area you are interested in.

6.Step 6

When you find the home of your choice you will need to put down $500 -$1000 - $1500 for earnest money. Earnest money shows that you are serious about the purchase of this home now I know that you are asking your self where does the $100 comes in at. Read the next step. Earnest money will vary depending on the purchase price of the home.

7.Step 7

Fha loans are approved at 97%, meaning you have to pay 3% of what ever your loan will be, for example if your loan is $160,000 your down payment will be $4,800.

8.Step 8

With the Fha loan you will no longer have to pay 3% of your loan. You only pay $100! Now that is a great program and it ends September of 2008.

9.Step 9

The $1000 that you put down as earnest money will go towards your closing cost! Hud will also pay 3% of your loan amount towards your closing cost, I told you it was a great program.

HUD $100 Down Payment Program

Posted by Molly Hay under For Buyers, For Sellers, General Information, Fave Neighborhood, Ask a REALTOR
$100 Down Payment on HUD Homes!

HUD has announced several new sales incentives on HUD homes that will make
these homes more affordable for homebuyers.

HUD has a special program for a limited time only which allows an owner-occupant buyer to pay only $100 down, instead of the usual required 3.5% down, and HUD will pay up to $2500 towards closing costs!!!!

In fact even some of my clients are getting any where from $500-$1500 back at closing!!!

If you ever thought about buying your own home…NOW is the time…
ONLY $100 down payment on a beautiful HUD home
* Large inventory of HUD homes available.

* Loan interest rates are low which means you can buy more home today

* Bargain prices on HUD Homes ready to move into now, Most properties are $30,000 - $100,000 below appraised market value!!!

Here are the requirements:

•It must be an owner occupied home. This is not a program for investors.
•The home must be purchased with FHA financing.
•This loan incentive is also available to owner occupant purchasers who obtain a FHA Home Repair loan. (203K Loan)
•Homes must be purchased through a HUD registered real estate agent.
•You do not need to be a first time Home Buyer
Now is a good time to consider the purchase of a HUD home in the Columbus OH area.

Please feel free to email me your contact information and the areas you are considering and I will email you HUD properties in the Columbus Ohio area.

Visit my HUD website at http://mollyhay.postlets.com

Understanding The Foreclosure Process

What is a Foreclosure?
A foreclosure occurs when a property owner cannot make principal and/or interest payments on his/her loan, typically leading to the property being seized and sold.

How does a foreclosure occur?
The foreclosure process is not very difficult to understand. There are several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure.

After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD). At the County Recorder’s Office. This puts the borrower on notice that he or she is facing foreclosure and starts a reinstatement period that typically runs until five days before the home is auctioned off.

If the default isn’t corrected (the loan must be brought current) within three months, a foreclosure sale date is established. The homeowner will receive a Notice of Sale, and this notice will also be posted on the property. In addition, the Notice of Sale is recorded at the County Recorder’s Office in the county where the property is located. Finally, this Notice of Sale is also published in newspapers local to the county in question over a three-week period.

The foreclosure Trustee Sale typically occurs on the steps of the county courthouse in which the property is located. The time and location of this sale are designated in the Notice of Sale. At the Trustee Sale, the property is auctioned in public to the highest bidder, who must pay the high bid price in cash, typically with a deposit up front and the remainder within 24 hours. The winner of the auction will then receive the trustee’s deed to the property.



What Happens at the Foreclosure Auction?


At auction, an opening bid on the property is set by the foreclosing lender. This opening bid is usually equal to the outstanding loan balance, interest accrued, and any additional fees and attorney fees associated with the Trustee Sale. If there are no bids higher than the opening bid, the property will be purchased by the attorney conducting the sale, for the lender.

If this occurs, and the opening bid is not met, the property is deemed a REO or Real Estate Owned. This typically occurs because many of the properties up for sale at foreclosure auctions are worth less than the total amount owed to the bank or lender.

When you purchase property at a foreclosure sale, all junior liens other than property taxes are wiped out. Priority of liens is determined by the date of recording. When you purchase a REO aka. Bank REO, you will typically receive the property with a clean title.

Buyer’s Guide to Buying a Bank-Owned or Foreclosure Property

Posted by Molly Hay under For Buyers, General Information, Ask a REALTOR
In today’s market, nearly four out of every five homes sold are bank-owned foreclosure properties. These are commonly referred to as Real Estate Owned (REO) properties

Buying an REO property is very different than a traditional buyer/seller transaction. The process is much more taxing and several more entities are involved in the REO transaction. This can create more time and challenges.

Many REO homebuyers, especially those buying a home for the first time or their first bank-owned property, get frustrated during the process.

Since the REO phenomenon started dominating sales, not coincidently, customer service scores in title, escrow, lending and real estate have plummeted.

I hope you find this guide helpful in your REO Home buying process. While this guide will not change the way the transaction occurs, it may help set more reasonable expectations upfront and eliminate some surprises.

Buying an REO is a great way to save money and get a fantastic deal. Just be prepared for the uniqueness of the process.

What is an REO or bank-owned property?

A property acquired in foreclosure and now owned by the bank that foreclosed on the property is called an REO or bank-owned property.

How did this property become an REO?

The last owner of this home was not able the mortgage payments. The mortgage note holder seized the property and evicted the owner. The bank attempted to auction the property and pay off the existing liens and mortgages. If that was not successful, the bank was then deeded the property by the Trustee. It is now an REO property.

How do banks sell REO properties?

The banks are not in the real estate holding business so they must sell these homes and turn them into cash. Because most foreclosed properties are not successful at auction, REO properties have flooded the market.

In any market, if there is oversupply, the property values depreciate. Because of the depreciated market, the banks are going to take, in most cases, a substantial loss on the property.

The banks have independent, professional real estate agents that assist them is marketing and selling their REO inventory. The banks also assign asset managers who work closely with these agents.

How do banks price their REO properties?

When a bank takes over a property, they conduct their own due diligence to get an accurate idea of the value of the home.

They hire a team of people to assess the current market value of the property through Real Estate Broker Price Opinions (BPO) and, in some cases, full property appraisals.

Based on these findings, they typically price the home within 10% of the current market value. There are always exceptions.

Banks are in business to make money. If they cannot make money, they need to minimize their losses. Banks are looking for a certain “net amount” on each particular property. This “net amount” is based on their research of the current market value minus costs associated with the property. They have priced the home sell quickly but as close to market price as possible.

Many buyers make the mistake of thinking the bank is desperate to get rid of the property. They believe they can submit a low-ball offer and expect to get an acceptance or at least a counter-offer. Think again! Low-ball offers (below 10% of list price) are not typically taken seriously. They may be a waste of your time and your agent’s. Worse yet, you may be perceived as an illegitimate buyer. Banks own many homes in the same area, and they use many of the same agents, so this could adversely affect future offers you make on other properties owned by the same bank or listed with the same agents.

Be reasonable. Do your research with your agent and determine what the home is really worth. Make your offer according to the home’s value, not to list price.

There are stories of buyers making tens of offers and not having a single one accepted. By making offers based on the home’s true value and not what it’s listed for, you can mostly avoid this challenge.

How do I find an REO property?

There are thousands of REO properties in our market. There is only one way to effectively research them all in a timely manner…hire a professional real estate agent. The seller, upon the successful completion of the transaction, typically pays for the buyer’s agent commission. This will cost you nothing, but may save you tens of thousands.

Are REO properties damaged?

Some are. Many are not. It is important to inspect the home yourself before making an offer. Once you have viewed the property, consult with your lender about the damage the home has, if any.

It is equally important to have a professional home inspector inspect the property before you commit to purchasing it. Your real estate professional will refer you to a top quality home inspector. When the inspection is complete, your lender will likely want to review a copy of it. They do this to protect you and their loan collateral, your new home.

Many loan programs will require repairs to be completed before you close escrow. If you do not have the money to do this and the selling bank is not willing to make these repairs, you may need to find another home.

What does “As-Is” mean?

Nearly every bank-owned property today is sold “as is.” You will have to sign a waiver that states you are willing to accept the home in the condition it’s in with no further repair.

If a bank is marketing their home “as is”, there is a possibility that the home needs repair and they are not willing to make them. Have your Real Estate Professional give you a thorough run down on what “as is” means to you during a transaction and once you have closed on the property. In addition, consult with your lender before making an offer on an “as is” home. Not all loan programs will allow you to buy a home that needs substantial repairs.

I am ready to buy an REO property, what do I need to do to get pre-qualified?

If you make an offer on a bank-owned property, they may require you to be pre-qualified with a home loan consultant from their own bank. They do this for two reasons; assurances and opportunities.

They want assurances that you are truly qualified to make an offer. While you may be pre-qualified by another lender, they will still want to review your credit, income and asset scenario in their own systems to make sure they are selling the home to a truly qualified buyer.

It is not negotiable in most cases and most banks will not consider your offer without a pre-qualification letter from their own institution.

This is legal for them to do this. However, you are not required to use this bank for your new mortgage loan; you just need to be pre-qualified through them. You can use whichever lender you choose for your actual purchase.

If you don’t want to be pre-qualified through numerous lenders, you may want to reconsider making offers on bank-owned properties or ask your agent to narrow your search to banks without this requirement.

The banks also want to create a business relationship opportunity with you, as well as your agent.

Do not let this mandatory pre-qualification discourage you. This is truly in your best interest. Many times, the Home Loan Consultants from these banks have been authorized to offer steep discounts and other incentives if you proceed with a loan from their bank. It certainly doesn’t hurt to have multiple lenders competing for your business.

In many cases, the bank is taking heavy losses on the property. If they can recapture the mortgage loan, at least it is not a complete loss. This creates an opportunity to parlay the great deal you got on the home with a great deal on your mortgage as well.

I am pre-qualified and ready to make an offer. What is next?

Your offer is submitted to the listing agent. The listing agent may have to submit to the Asset Manager, who works for the bank, and this is where the negotiation happens. It may take a few days for a response. Be patient. Do not bother writing in a short deadline for the seller to respond. They may not pay attention to it.

The bank will likely respond in the first 48 hours. Some banks take 3 - 5 business days. Once again, be patient. This is not your regular seller.

You will not get a response over the weekend or holidays. All offers submitted over the weekend will be presented the following business day.

As a rule of thumb, REO listing agents will tell you if you make an offer and do not hear back within five business days, the offer has been rejected. Do not wait around for the rejection or the counter. It may never come. Come back with a better offer or find another property.

What does bring my “highest and best offer” mean?

Because the homes are priced so well, it is very common for the bank to get multiple offers.

If the bank gets multiple offers, instead of making a counter proposal to you, they may go back to all of the potential buyers and ask for each buyer’s highest and best offer.

This means come back with your best offer, as the bank will choose one at this point. In many cases, the bank will not return counter-offers after they have requested this.

If you are presented with this opportunity, it means you are in the running. You now have one more opportunity to increase the price or better the terms of your offer. You can choose to do nothing at this point but it may not get you anywhere.

Meet with your agent. Determine the true value of the home. Review your down payment, closing costs needs, and loan terms and then come back with your best shot.

I made a list price offer but they didn’t respond. Why?

Many REO properties, especially those listed below market value receive multiple offers. Some houses sell above list price. The bank is like any other seller in the market. They can choose not to accept your offer if one comes in they think is better than yours.

If you offer list price and ask for your closing costs to be paid and another buyer offers list price and doesn’t seek closing costs, the other buyer’s offer is stronger.

How long will it take to complete my transaction and move into my property?

Traditionally, buyer and seller contracts are 30 days. However, this is not a traditional buyer/seller transaction. In today’s REO property market, many buyers feel more comfortable with 45-day closings. Many banks have late fees of $100 or more per day past the contracted close of escrow date. These fees add up quickly so it is important to understand what problems can arise that may make you late.

What can make me late?

Aside from the regular loan process, which sometimes takes longer in today’s stricter lending environment, there are many challenges unique to REO properties.

When the previous owner of your new home was foreclosed on and the bank took possession, a “Trustee’s Deed” was issued in the bank’s name. If this process is not executed properly, it may cause delays when the county is trying to record the deed into your name. There is little that you can do about this except wait until it is corrected. I have seen this issue take between one day to seven weeks to resolve.

If a Home Owner’s Association (HOA) manages the community, your title company will request an HOA demand on the property. This demand will ensure that the bank pays any association fees and fines at close of escrow. If they are not paid at closing, they will transfer with the property into your name and will then be your responsibility.

It’s pretty likely that there hasn’t been an actual person living in this home in sometime. This means the home has not been kept. There may be a lot of fines (landscaping, upkeep, trash, etc.) levied from the HOA.

This can take time and be complicated but is necessary that it is done and done correctly. For more details, ask your escrow officer. It’s their responsibility to get this resolved.

For the most part, if the close of escrow is delayed by problems that are out of your control, the bank should not penalize you. Just be sure to do your part in a timely manner, and you should be ok.

I am in escrow and we discovered a bunch of repairs that need to be made to the home…what do I do now?

Many people that have lost their homes to foreclosure have been struggling financially. This usually means the home has not been kept properly and is in need of repairs and general maintenance. Other homeowners, once they know they are losing their home, damage the property purposely.

When buying an REO property, you must be prepared to do some repairs. Banks may not agree to make these repairs. They may not pay for these repairs. This may require out-of-pocket expense for you.

They may be willing to help with some, but don’t plan on it. Know what you are buying before you make your offer and be prepared to spend some money for repairs before you move in.

In most contracts, you can back out of the purchase if you find problems with the property or in loan qualifying in a certain time period. This is called the due-diligence period.

Make sure you know how long this due diligence period is when entering into a contract. Complete all inspections within that period so you can make an informed decision on whether or not to proceed with the purchase. It is important to respect these deadlines because they are strictly enforced.

Some repairs will be obvious when you visit the property. Others may be identified during the property inspection and the appraisal process. The inspector will identify repairs issues and may be able to give you a written estimate of the cost to repair the property. In some cases, an appraiser may also call for repairs to the property to bring it up to livable or safe condition.

Identify these issues quickly so you know what you are facing and have the opportunity to cancel if necessary. Again, this will help protect your deposit money.

You will want to be cautious buying a bank-owned property if you barely have enough money for the down payment and closing costs unless you have arranged for repairs with the seller.

I have signed my loan docs and I am still waiting for my keys. What is taking so long?

Just like you executed many documents at your loan signing, the seller has a stack of closing documents to sign as well. Remember, the seller of your home is a bank or some other financial institution. It may take the representative who is authorized to sign off on these documents days or even weeks to get around to it. Your trusted and skilled escrow officer will make sure to stay on this for you.

So, there you have it. Complicated? Yes. Frustrating? Sometimes. Time-consuming? Quite often.

At the end of the day, hopefully, you are getting a new home for you and/or your family at a much-discounted price so it will all be worth it.

The best tip we can give you is to remain positive and be patient. Expect the challenges. There will likely be some. Together with your professional real estate agent and experienced escrow officer, we will all do our very best to get you through it successfully.

Please call Molly Hay to get a list of Bank Owned, REO, and Foreclosed properties. 614.581.2086

Buyer’s Guide to Buying a Bank-Owned or Foreclosure Property

Posted by Molly Hay under For Buyers, General Information, Ask a REALTOR
In today’s market, nearly four out of every five homes sold are bank-owned foreclosure properties. These are commonly referred to as Real Estate Owned (REO) properties

Buying an REO property is very different than a traditional buyer/seller transaction. The process is much more taxing and several more entities are involved in the REO transaction. This can create more time and challenges.

Many REO homebuyers, especially those buying a home for the first time or their first bank-owned property, get frustrated during the process.

Since the REO phenomenon started dominating sales, not coincidently, customer service scores in title, escrow, lending and real estate have plummeted.

I hope you find this guide helpful in your REO Home buying process. While this guide will not change the way the transaction occurs, it may help set more reasonable expectations upfront and eliminate some surprises.

Buying an REO is a great way to save money and get a fantastic deal. Just be prepared for the uniqueness of the process.

What is an REO or bank-owned property?

A property acquired in foreclosure and now owned by the bank that foreclosed on the property is called an REO or bank-owned property.

How did this property become an REO?

The last owner of this home was not able the mortgage payments. The mortgage note holder seized the property and evicted the owner. The bank attempted to auction the property and pay off the existing liens and mortgages. If that was not successful, the bank was then deeded the property by the Trustee. It is now an REO property.

How do banks sell REO properties?

The banks are not in the real estate holding business so they must sell these homes and turn them into cash. Because most foreclosed properties are not successful at auction, REO properties have flooded the market.

In any market, if there is oversupply, the property values depreciate. Because of the depreciated market, the banks are going to take, in most cases, a substantial loss on the property.

The banks have independent, professional real estate agents that assist them is marketing and selling their REO inventory. The banks also assign asset managers who work closely with these agents.

How do banks price their REO properties?

When a bank takes over a property, they conduct their own due diligence to get an accurate idea of the value of the home.

They hire a team of people to assess the current market value of the property through Real Estate Broker Price Opinions (BPO) and, in some cases, full property appraisals.

Based on these findings, they typically price the home within 10% of the current market value. There are always exceptions.

Banks are in business to make money. If they cannot make money, they need to minimize their losses. Banks are looking for a certain “net amount” on each particular property. This “net amount” is based on their research of the current market value minus costs associated with the property. They have priced the home sell quickly but as close to market price as possible.

Many buyers make the mistake of thinking the bank is desperate to get rid of the property. They believe they can submit a low-ball offer and expect to get an acceptance or at least a counter-offer. Think again! Low-ball offers (below 10% of list price) are not typically taken seriously. They may be a waste of your time and your agent’s. Worse yet, you may be perceived as an illegitimate buyer. Banks own many homes in the same area, and they use many of the same agents, so this could adversely affect future offers you make on other properties owned by the same bank or listed with the same agents.

Be reasonable. Do your research with your agent and determine what the home is really worth. Make your offer according to the home’s value, not to list price.

There are stories of buyers making tens of offers and not having a single one accepted. By making offers based on the home’s true value and not what it’s listed for, you can mostly avoid this challenge.

How do I find an REO property?

There are thousands of REO properties in our market. There is only one way to effectively research them all in a timely manner…hire a professional real estate agent. The seller, upon the successful completion of the transaction, typically pays for the buyer’s agent commission. This will cost you nothing, but may save you tens of thousands.

Are REO properties damaged?

Some are. Many are not. It is important to inspect the home yourself before making an offer. Once you have viewed the property, consult with your lender about the damage the home has, if any.

It is equally important to have a professional home inspector inspect the property before you commit to purchasing it. Your real estate professional will refer you to a top quality home inspector. When the inspection is complete, your lender will likely want to review a copy of it. They do this to protect you and their loan collateral, your new home.

Many loan programs will require repairs to be completed before you close escrow. If you do not have the money to do this and the selling bank is not willing to make these repairs, you may need to find another home.

What does “As-Is” mean?

Nearly every bank-owned property today is sold “as is.” You will have to sign a waiver that states you are willing to accept the home in the condition it’s in with no further repair.

If a bank is marketing their home “as is”, there is a possibility that the home needs repair and they are not willing to make them. Have your Real Estate Professional give you a thorough run down on what “as is” means to you during a transaction and once you have closed on the property. In addition, consult with your lender before making an offer on an “as is” home. Not all loan programs will allow you to buy a home that needs substantial repairs.

I am ready to buy an REO property, what do I need to do to get pre-qualified?

If you make an offer on a bank-owned property, they may require you to be pre-qualified with a home loan consultant from their own bank. They do this for two reasons; assurances and opportunities.

They want assurances that you are truly qualified to make an offer. While you may be pre-qualified by another lender, they will still want to review your credit, income and asset scenario in their own systems to make sure they are selling the home to a truly qualified buyer.

It is not negotiable in most cases and most banks will not consider your offer without a pre-qualification letter from their own institution.

This is legal for them to do this. However, you are not required to use this bank for your new mortgage loan; you just need to be pre-qualified through them. You can use whichever lender you choose for your actual purchase.

If you don’t want to be pre-qualified through numerous lenders, you may want to reconsider making offers on bank-owned properties or ask your agent to narrow your search to banks without this requirement.

The banks also want to create a business relationship opportunity with you, as well as your agent.

Do not let this mandatory pre-qualification discourage you. This is truly in your best interest. Many times, the Home Loan Consultants from these banks have been authorized to offer steep discounts and other incentives if you proceed with a loan from their bank. It certainly doesn’t hurt to have multiple lenders competing for your business.

In many cases, the bank is taking heavy losses on the property. If they can recapture the mortgage loan, at least it is not a complete loss. This creates an opportunity to parlay the great deal you got on the home with a great deal on your mortgage as well.

I am pre-qualified and ready to make an offer. What is next?

Your offer is submitted to the listing agent. The listing agent may have to submit to the Asset Manager, who works for the bank, and this is where the negotiation happens. It may take a few days for a response. Be patient. Do not bother writing in a short deadline for the seller to respond. They may not pay attention to it.

The bank will likely respond in the first 48 hours. Some banks take 3 - 5 business days. Once again, be patient. This is not your regular seller.

You will not get a response over the weekend or holidays. All offers submitted over the weekend will be presented the following business day.

As a rule of thumb, REO listing agents will tell you if you make an offer and do not hear back within five business days, the offer has been rejected. Do not wait around for the rejection or the counter. It may never come. Come back with a better offer or find another property.

What does bring my “highest and best offer” mean?

Because the homes are priced so well, it is very common for the bank to get multiple offers.

If the bank gets multiple offers, instead of making a counter proposal to you, they may go back to all of the potential buyers and ask for each buyer’s highest and best offer.

This means come back with your best offer, as the bank will choose one at this point. In many cases, the bank will not return counter-offers after they have requested this.

If you are presented with this opportunity, it means you are in the running. You now have one more opportunity to increase the price or better the terms of your offer. You can choose to do nothing at this point but it may not get you anywhere.

Meet with your agent. Determine the true value of the home. Review your down payment, closing costs needs, and loan terms and then come back with your best shot.

I made a list price offer but they didn’t respond. Why?

Many REO properties, especially those listed below market value receive multiple offers. Some houses sell above list price. The bank is like any other seller in the market. They can choose not to accept your offer if one comes in they think is better than yours.

If you offer list price and ask for your closing costs to be paid and another buyer offers list price and doesn’t seek closing costs, the other buyer’s offer is stronger.

How long will it take to complete my transaction and move into my property?

Traditionally, buyer and seller contracts are 30 days. However, this is not a traditional buyer/seller transaction. In today’s REO property market, many buyers feel more comfortable with 45-day closings. Many banks have late fees of $100 or more per day past the contracted close of escrow date. These fees add up quickly so it is important to understand what problems can arise that may make you late.

What can make me late?

Aside from the regular loan process, which sometimes takes longer in today’s stricter lending environment, there are many challenges unique to REO properties.

When the previous owner of your new home was foreclosed on and the bank took possession, a “Trustee’s Deed” was issued in the bank’s name. If this process is not executed properly, it may cause delays when the county is trying to record the deed into your name. There is little that you can do about this except wait until it is corrected. I have seen this issue take between one day to seven weeks to resolve.

If a Home Owner’s Association (HOA) manages the community, your title company will request an HOA demand on the property. This demand will ensure that the bank pays any association fees and fines at close of escrow. If they are not paid at closing, they will transfer with the property into your name and will then be your responsibility.

It’s pretty likely that there hasn’t been an actual person living in this home in sometime. This means the home has not been kept. There may be a lot of fines (landscaping, upkeep, trash, etc.) levied from the HOA.

This can take time and be complicated but is necessary that it is done and done correctly. For more details, ask your escrow officer. It’s their responsibility to get this resolved.

For the most part, if the close of escrow is delayed by problems that are out of your control, the bank should not penalize you. Just be sure to do your part in a timely manner, and you should be ok.

I am in escrow and we discovered a bunch of repairs that need to be made to the home…what do I do now?

Many people that have lost their homes to foreclosure have been struggling financially. This usually means the home has not been kept properly and is in need of repairs and general maintenance. Other homeowners, once they know they are losing their home, damage the property purposely.

When buying an REO property, you must be prepared to do some repairs. Banks may not agree to make these repairs. They may not pay for these repairs. This may require out-of-pocket expense for you.

They may be willing to help with some, but don’t plan on it. Know what you are buying before you make your offer and be prepared to spend some money for repairs before you move in.

In most contracts, you can back out of the purchase if you find problems with the property or in loan qualifying in a certain time period. This is called the due-diligence period.

Make sure you know how long this due diligence period is when entering into a contract. Complete all inspections within that period so you can make an informed decision on whether or not to proceed with the purchase. It is important to respect these deadlines because they are strictly enforced.

Some repairs will be obvious when you visit the property. Others may be identified during the property inspection and the appraisal process. The inspector will identify repairs issues and may be able to give you a written estimate of the cost to repair the property. In some cases, an appraiser may also call for repairs to the property to bring it up to livable or safe condition.

Identify these issues quickly so you know what you are facing and have the opportunity to cancel if necessary. Again, this will help protect your deposit money.

You will want to be cautious buying a bank-owned property if you barely have enough money for the down payment and closing costs unless you have arranged for repairs with the seller.

I have signed my loan docs and I am still waiting for my keys. What is taking so long?

Just like you executed many documents at your loan signing, the seller has a stack of closing documents to sign as well. Remember, the seller of your home is a bank or some other financial institution. It may take the representative who is authorized to sign off on these documents days or even weeks to get around to it. Your trusted and skilled escrow officer will make sure to stay on this for you.

So, there you have it. Complicated? Yes. Frustrating? Sometimes. Time-consuming? Quite often.

At the end of the day, hopefully, you are getting a new home for you and/or your family at a much-discounted price so it will all be worth it.

The best tip we can give you is to remain positive and be patient. Expect the challenges. There will likely be some. Together with your professional real estate agent and experienced escrow officer, we will all do our very best to get you through it successfully.

Please call Molly Hay to get a list of Bank Owned, REO, and Foreclosed properties. 614.581.2086

HUD $100 Down Payment Program

Posted by Molly Hay under For Buyers, For Sellers, General Information, Fave Neighborhood, Ask a REALTOR
$100 Down Payment on HUD Homes!

HUD has announced several new sales incentives on HUD homes that will make
these homes more affordable for homebuyers.

HUD has a special program for a limited time only which allows an owner-occupant buyer to pay only $100 down, instead of the usual required 3.5% down, and HUD will pay up to $2500 towards closing costs!!!!

In fact even some of my clients are getting any where from $500-$1500 back at closing!!!

If you ever thought about buying your own home…NOW is the time…
ONLY $100 down payment on a beautiful HUD home
* Large inventory of HUD homes available.

* Loan interest rates are low which means you can buy more home today

* Bargain prices on HUD Homes ready to move into now, Most properties are $30,000 - $100,000 below appraised market value!!!

Here are the requirements:

•It must be an owner occupied home. This is not a program for investors.
•The home must be purchased with FHA financing.
•This loan incentive is also available to owner occupant purchasers who obtain a FHA Home Repair loan. (203K Loan)
•Homes must be purchased through a HUD registered real estate agent.
•You do not need to be a first time Home Buyer
Now is a good time to consider the purchase of a HUD home in the Columbus OH area.

Please feel free to email me your contact information and the areas you are considering and I will email you HUD properties in the Columbus Ohio area.

Visit my HUD website at http://mollyhay.postlets.com