Does it take longer to buy a foreclosure? If yes, why? How long in the Northern Virginia area?

Question

I sold my home and entered a 1 year rental agreement earlier this year. I am now ready to purchase and would like an idea of how far in advance I should pursue a bank owned foreclosure?

Answer 1

If its listed already with a realtor then just whenever you get approved for the loan and make the offer, if its not been processed yet then you will need to wait until it gets listed with a realtor.

Answer 2

It depends on how you plan to buy the foreclosure property. Here are the basic stages of foreclosure and how long it would take to purchase the property at that stage:

Pre-Foreclosure - This is a property where the owner has missed payments and is in danger of losing the home to foreclosure. At this point, the bank does not control what the owner can do with the home, as long as they are able to satisfy the lien against the home. Buying a pre-foreclosure home would be the same as buying any other home on the open market. It's may be even faster, because the owner has more of an incentive to sell.

Sheriff's Sale - A home being sold at sheriff's sale is one that's at the very end of the foreclosure process. The home is being sold at auction to the highest bidder. Many states have a redemption period after the sale, so if you buy a home at a sheriff's sale, you would just be waiting for the redemption period to end. (30 days to 1 year)

REO - This is a property that is owned by the lender (or lenders agent) who foreclosed on the property. They buy the homes back at sheriff sale to re-list on the open market. This allows them to get a higher price for the home. These properties are usually sold by real estate agents and you can expect the same time period as buying any other home on the market.

When buying a foreclosure home, you'll want to make sure you do all the proper home inspections and make sure you do your own appraisal. Foreclosure properties are likely to have many more problems than normal properties listed. Agents selling foreclosure properties are not responsible for disclosing any hidden problems with the home, so it's up to you to do all the proper research before buying the home. Be prepared to discover these hidden problems and make sure your offer price takes these unknown problems into account.

You'll also want to determine if an eviction will be necessary. If you have purchased a foreclosure home while someone is still living in it, (owner or tenant) you may have to deal with it yourself. An eviction can take quite a long time if you don't do it correctly. Make sure you allow time and finances for a proper eviction.

Good luck and feel free to contact me directly if you have any more specific questions.

Answer 3

Bank owned foreclosures are only slightly slower than conventional purchases, and that's due to the workload currently on the folks who need to analyze the offers tendered and respond to them.  Sometimes foreclosure owners take several weeks to decide on an offer.

If you buy a foreclosure, be aware that you buy 'as is', so be sure to have the place professionally inspected as a contingency to your offer.  That way, you can walk away if major expensive problems are uncovered.

Answer 4

it could take 6 months to a year, in the event the owners file bankruptcy, or enter the case and contest it.

Answer 5

Usually it takes about 30 days from the date of foreclosure to list the property on the open market. It really depends upon how busy the bank's REO department is, and it is pretty busy in Northern Virginia.

If the house is already listed, you can assume it will take no longer than any other purchase.

Be sure to get a home inspection and appraisal before you sign on the dotted line.

Answer 6

The worst part is getting approval of your offer. With a private seller, your offer says I want a response w/I three days (or something like that), and it usually works. Well, banks don’t give a rat’s tail about your response deadline. They can take weeks to get back to you or may never respond at all.  A lot of it depends on the size of the bank. Bank of American is going to take a lot longer to respond that a locally owned credit union. It’s all about how many people have to approve your offer.