Quick Search

Do you want to Buy a Foreclosure?

Foreclosures and your mortgage

The Dallas area has always been a foreclosure market, in fact we consistently rank among the nations highest. A recent article in the Dallas Morning News, reports that home foreclosures are up 18% from a year ago. Dallas County was up 11% with 1597 homes set for auction and Collin County up 40% with 456 homes set for April auction.

There are a lot of reasons for the foreclosures: sub prime loans, 100% financing, job loss, divorce and a thing called life. There has always been a sub prime market and always will be. The problem with the last few years is that lenders made it easy to borrow money. Right now, lenders have tightened their lending practices for everyone because of the defaults prevalent all over the country.

What does that mean to you if you are in the market for buying a home? Go ahead and get pre-qualified or pre-approved for a mortgage. This should be the first step before you even go out and start looking for a home. It surprises me that most people do this after they find a home only to find out they can’t afford what they want or can’t get the exact loan they want. Remember, you are living with the house and the loan, both are equally important.

Also, find a mortgage broker or lender that will actually service the loan. Escrow is the most complained about aspect of the real estate process, that is closing your home. A good broker or lender will explain and walk you through the process in a professional manner, no surprises on fees and other miscellaneous charges at the closing table.

Just like getting to know your real estate agent, it is a good idea to physically meet the person that is helping you get the loan. The loan you get should not just be about the interest rate it should be about the whole package.

Now with your pre qualification or pre approval letter you are in a perfect position to buy that foreclosure, pre foreclosure or short sale or whatever the market bears. Just remember the process for finding and buying a foreclosure is much different than just a resale or new home. It will take more time and you probably will be putting more money into a distressed property. A Real Estate Owned property (REO) which is a lender or bank owned do not work on the weekends and usually will try and bid the property up with multiple offers, you really need to know what the home is worth.

I pull up foreclosure activity on the MLS every week for 75093 and 75024 and 25 homes came up in prime neighborhoods, all 10-30% below appraisal value. Some are a very good buy and some you should not even look it. Knowing the neighborhood and where to find these buys are extremely important. Don’t assume anything.

The number of foreclosures have more than doubled within the past year and there are good deals to be made. With the interests staying low (and I believe they will) make sure you get your mortgage qualification done first then go find your deal. In case you would like some help, we have done many foreclosures and can make this whole process a professional and profitable experience.