Tips On Buying A Foreclosure

Jon Real Estate Leave a Comment

Hard to say how great an impact the recent hullabaloo over foreclosures will have on the Atlanta market, but one thing is for sure: buyers of foreclosed properties need to do their due diligence.  Atlanta law firm Neel and Robinson hit the key points on the head in a recent email.  The cut and paste, below (with hyperlinks courtesy of A is for Atlanta):

When a foreclosed property is being resold by the lender, the buyer is usually asked and often forced to close with the law firm chosen by the seller.  Many buyers and their agents are starting to assert their wishes to close with their choice of attorneys.

 

Regardless of which attorney handles the closing, the buyers and their agent should always confirm the following when buying a foreclosure:

 

  1. County and city property taxes
    1. Confirm payment on the HUD if the current bill is out.
    2. If paid prior to closing or “POC” (paid outside closing), ask for written proof.
    3. Tax prorations – check the calculations, because the seller will not adjust the prorations later.  If prorated on last year’s estimate, make sure it is reasonable and reflects any major changes such as the loss of homestead exemption.

 

  1. Other bills not wiped out by foreclosure
    1. City/county garbage and sanitation bills
    2. Water bills on previous owners in the chain of title
    3. Demolition liens and other government bills

 

  1. Homeowner Association
    1. Is there a mandatory HOA?  (The seller bank may not know for sure; ask the closing attorney)
    2. Has the HOA account been adjusted since the foreclosure?
    3. Make sure the closing attorney has a written status letter from the HOA – get a copy at closing.
    4. Is the seller paying the dues from the foreclosure date up to the closing date?

 

  1. Owner’s Title Insurance

Never buy a foreclosure without title insurance – the seller does not guarantee clear title (just insurable title) and will only sign a limited warranty deed to the buyers.

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Jon

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Jon Effron is widely regarded as one of the leading Realtors in Atlanta, working with both buyers and sellers throughout the metro area to maximize their real estate investments. In 2014, Jon was the #1 individual agent at Keller Williams Intown, one of the largest brokerages in Intown Atlanta. Prior to becoming a Realtor, Jon was the Vice President of Development at Tujay Group, an Atlanta real estate development firm. His career pre-real estate included stints at ABCNews.com, eGroups (now Yahoo! Groups) and Elite Traveler magazine, where he served as the Vice President of Marketing.