Welcome back to the Fazblog. Last week we took a question from Aaron in Plymouth on the process of purchasing a short sale or foreclosed listing. With the help of Judi Roberts we were able to give you a pretty good glimpse of what to expect when it comes to the length of the process. Judi explained how her certification and relationships help her efficiently expedite that process for her clients. This week we bring in Sandy Steiner (Short Sale & Foreclosure Resource) and Colin Simpson (Certified Distressed Property Expert) to discuss damages or repairs that you may find in a short sale or foreclosure. Also, how these agents can assist homeowners who are trying to avoid foreclosure.
One of Aaron’s points of interest was weighing an attractive listing price with doing appropriate repairs to the residence after purchasing the property. Aaron’s concern was if he was still saving enough money after the cost, time and effort he put in on the repairs. Colin describes what a buyer should be prepared for when weighing these factors, “As far as owning a distressed property the buyer should make sure they have a thorough inspection and some extra cash on hand to fix items after closing.” Colin went on to say that the price of the listing usually considers the repairs that need to be made to the house although there are times when the lender will help with those repairs. Sandy recommends discussing the responsibility of those repairs in the agreement, “Sometimes lenders will make repairs if asked and sometimes they will only sell a home “as is.” It never hurts to ask, though, because it could be negotiable issue.”
If repairs will not be covered by the lender and you are short on available cash to make these repairs both Colin and Sandy recommend a 203K or 403K FHA loan. Sandy explains, “The lender may require you to make the repairs within a specified time period after the sale is closed and also require money to be escrowed at closing for those repairs. FHA has a special 203K or 403K loan which allows buyers to include repair costs in their loan.”
Typically, when you think of working with an agent with a distressed property it is usually in terms of purchasing a listing. Colin stressed that their expertise in this area was not limited to representing the buyer, but also a potential home owner, “Our knowledge also lends us to providing knowledge to homeowners who may be trying to avoid foreclosing on a residence. We are prepared to help them avoid minimal damage when it comes to their bottom line as well as their credit.” It may also be interesting to note that foreclosing on your home not only affects your credit, but could also be disclosed when applying for some jobs.
We stressed this last week; however Sandy’s encouragement is a little more impactful, “Each situation and property is a little different. Be sure to speak with a lender and a certified REALTOR® before you make an offer to discuss possible scenarios and options.” As a reminder, Roger Fazendin REALTORS® has four different agents certified to specialize in distressed homes. Judi Roberts and Colin Simpson have earned their CDPE (Certified Distressed Property Expert). Sandy Steiner and Andy Fazendin have received a SFR certificate (Short Sale & Foreclosure Resource). The details and fine print can be very overwhelming throughout the process. As you can tell from our two posts on distressed homes our agents, are extremely qualified to guide you in obtaining your residence. It would be in your best interest to consult one of these agents when considering a distress listing.
Well we have completed our first month of entries. We thank you for reading along with us. We will back next week for our second REALTOR® Profile.