Real estate: Real Estate Opportunities of a Lifetime

Published 11:40 pm Saturday, September 3, 2011

By Randy Parker

Broker/Owner of Real Living Advantage and Parker Auction Network

In today’s market, foreclosed properties have become the latest greatest craze. First time home buyers, first time investors, as well as today’s savviest investors see the potential and opportunity in getting involved in the feeding frenzy created by the flood of foreclosures that’s filling the ranks of our multiple listing services.

At no time in recent history have buyers been able to purchase property at such discounted prices, with such favorable financing, and turn it into their personal home or into an income producing property. We’ve all heard the advertisements about buying and selling property using none of your own money and making thousands of dollars in a short period of time, unfortunately most of those programs are designed to sell books and videos. However for those who are willing to do their homework and understand the process of buying foreclosures there are great benefits and financial prosperity to be gained.

Today’s buyer has an unbelievable amount of information available to them at the click of a mouse. Websites are filled with information that is pulled from multiple listing service feeds and Broker websites giving potential buyers the opportunity of browsing the market and finding a property that could become their next purchase. Much of the information gathered through online searches may need clarification and the help of a Realtor for the buyer to have a successful transaction.

One thing we’ve learned through this market is simple; real estate transactions are not created equal and no two are ever alike. While one transaction may be smooth and easy, another may be filled with difficulties never anticipated or even experienced before. Each lending institution and foreclosure process is different as well as each asset company who handle many of the foreclosed properties for the lenders. Rules of making offers and filling out contracts vary from one company to the next. Therefore it is extremely important to work with a knowledgeable and skilled Realtor who understands the process and is trained as a Real Estate Professional.

One of the first things to know is who is qualified to make an offer on a particular property. With many of the foreclosed properties, the opportunity of buying is given to owner occupants for a specified period before investors are allowed to bid. For the most part those periods run from fifteen to thirty days with the most common being thirty days.  An owner occupant as the term implies is a buyer who will be living at the property with it being their primary residence and in most cases documents will be signed agreeing to that fact. An investor is just that, someone buying the property without intentions of living there but rather renting, leasing, or flipping with the intention of producing income.

Next you should always have your financing in place or at least ready to go before you start making offers. If you require financing to make your purchase and most people do, then before you start making offers get with a good, reputable and knowledgeable lender (and I emphasize knowledgeable) to become pre-qualified for your loan. In most cases pre-qualification letters from a lending institution will be required when submitting or soon after submitting offers.   A Realtor will suggest and advise that you be pre-qualified even before you start your search for a property. Again with all the changes, rules and regulations that come with foreclosed properties make sure that your lender and Realtor understand the financing process. If you are a cash buyer the purchasing process is basically the same as financing, however the transaction may be completed in less time and as we all know cash gets a lot of attention and may give you an advantage over other buyers.

Once your financing is in place then it’s time to get serious about your search for properties.  Before you start your property search, however, you would be wise to search for a Real Estate Professional that you are comfortable with and confident that they are knowledgeable, professional, and skilled at working through this process. I do keep referring to these transactions as a process and indeed they are, so make sure your Realtor understands it. The process involves among other things, gaining entry into the property, submitting your offer, filling out the contracts and pages of special addendums, making sure that you understand the forms, the special dates, inspection period, financing period, and everything else from lead based paint exhibits to the closing statement. One of the best places to start your search for a Realtor is at the Carpet Capital Association of Realtors. There you will find a roster of Brokers and agents who are well qualified and able to assist you in any type of real estate transaction.

After you have your financing and Realtor in place then it’s time to get serious about getting involved in the best buyers market possibly in our lifetime. But put this in your notes and remember it; be Patient. This market is very unpredictable and often there are surprises that no one anticipated.  Expect the best but prepare for the difficult. For instance, title issues may hold up the closing process, vandalism may cause delays; the sheer number of transactions may be congesting the offices of the foreclosure asset management companies as well as the government entities involved in the process. Also as a buyer you may be required to pay extension fees in advance for problems that you have not created, but its all part of the process, and remember the “deal,” you’re buying a property at a deeply discounted price. So if there are delays and you do have to spend a little extra money it’s still worth the trouble for the deal you are getting.  

So if you think you’re ready to become a part of the great world of real estate, jump in and join the thousands across the nation who are taking advantage of a market like we may never see again. Do your homework, get your financing in order, connect with a Realtor to guide, and walk you through the process to a successful closing and a great investment.  

This column is part of a series of columns from The Carpet Capital Association of Realtors that run on the first Sunday of every month.