There is no doubt that the $8,000 tax credit stimulated a lot of sales this year. We certainly hope Congress sees fit to keep it going into 2010. However, it has stimulated a lot of hopes and wishes that went nowhere. Many folks definitely have a "trail of tears" and are frustrated trying to buy foreclosed and "short sale" properties using the tax credit. If you are planning to enter the market to purchase a foreclosed home, please know the following:

  1. Get preapproved by a lender, in writing, before you start. Lenders are under pressure and very stingy with approvals.
  2. You may have to compete with multiple offers for the really great buys. Be aggressive with you offer.
  3. Many foreclosed properties need repairs. If serious, FHA loans may not qualify. Also do you have backup abilities or funds to repair?
  4. Prices are still dropping. Appraiser may come in lower than sale price. Back to the negotiating table.
  5. Check property taxes and condo feed, if applicable. May run more than mortgage payment.
  6. "Short Sales" are a different ball game from bank owned foreclosed properties. The seller still holds title. Expect a minimum of 90 days for approval, "if approved".

Foreclosures are definitely worth buying. You just need to be prepared for the sequence of events that lead to a successful purchase. Make sure you work with a Realtor with foreclosure experience. You will avoid that "trail of tears"!  If you have more questions, please contact us at piketteamrealtors@hotmail.com.