Many are not aware of the potential of the foreclosure inventory and its potential for investing. While interest rates are at a historical low, the homes are affordable and the amount of inventory is high. This makes for the perfect time to move up or move out!
There is a significant portion of foreclosure properties in New Jersey for buyers and investors to choose from. Even if you are not the "handy man" yourself, many lenders are providing renovation financing loans to bundle contracted renovations as well as the purchase price into one mortgage. The interest rates are usually slightly higher (by an 1/8th to a 1/2 typically) and there are a few more pieces of paper required to be completed before the lender will write you a check, however, it has opened the possibilities for many "non-handy" buyers to take advantage of great deals.
As banks are not in the real estate business and do not enjoy having a large inventory of real estate, they tend to rely on the expertise of a Real Estate professional. By contacting agencies whom work with banks on a regular basis (typically referred to as Real Estate Owned a.k.a. REO specialists), you are opened up to many more affordable homes.
The fear of "AS IS" typically is a concern for homebuyers, however, while adjustments and credits are not as easy to come by, they do exist. Banks tend to be more willing to assist in the expense of "unforeseen" issues like termites and not so generous for cosmetics. When purchasing foreclosure, it is the sole responsibility of the buyer to make sure a Certificate of Occupancy is granted by the town before the property is "move-in" ready. When using a renovation loan, the lender allows the money for the purchase of the property to be released and the property closed with just a Temporary Certificate of Occupancy. You will have to check with your township and your lender to see what requirements are needed beforehand, however, buyers are given the opportunity to buy the property and fix it after closing. No substantial repairs are left on the buyer BEFORE closing. The lender will allow a certain time-frame from the closing date to complete all necessary repairs, and the town will only give some sort of time frame as well to make all necessary repairs.
As you can see, both "bank owned" properties and special financing offers from lenders, are two other ways buyers can take advantage of this market. For more information, please comment or visit me at: http://associates.era.com/christinemarkow to learn about inventory available in your area.
*Licensed in New Jersey only. Please contact me for referrals in out-of-state purchases. All information is deemed reliable but not guaranteed and is merely the professional opinion of Christine Markow. Please refer to your local lender, municipal building and attorney for further information regarding the purchase and financial lending for foreclosure properties. Thank you!