How To Buy A Foreclosed Home

The 2020 Housing Market Continues Some Trends

Low inventory, well priced properties going under contract quickly and overall high median home prices continue to dominate the real estate market in 2020. However, we are seeing some change within each of those positions. For instance, median prices in Boulder are sky high, but not as high as they were. The median home price last month was a little north of $900K – a decrease from the prior year. I don’t think we are yet at the stage where you need to be versed in how to buy a foreclosed home. Those opportunities are not on the immediate horizon. But you do want to be aware of what changes are coming to our real estate home market.

What Is A Foreclosed Home?

When home owners fail to make their mortgage payments in a timely manner (and infrequently, when home owners associations dues go unpaid) a lender or association can seize the property.  This his handled through the county where the property is located. Bank owned properties are homes where the lender has completed the foreclosure process and is now reselling the home.

How To Buy A Foreclosed Home

Much like buying a regular home, your first steps are to find a good Realtor (hint, Pick Me, Pick me!) and get qualified with a home mortgage lender.  This is really important in a tight Sellers market where bank owned properties tend to be value priced relative to the average resale.   Once you find a suitable foreclosure, don’t be surprised with the seller prefers to use a bank attorney generated contract.  During the Great Recession we saw this a lot. 

Foreclosed properties also tend to have deficiencies.  The appliances are all too often removed by the Seller – even the dishwasher.  Floor coverings can be in tough condition.  Be prepared for an ugly home inspection report.  And banks tend to be very reluctant to invest in repairs.  So be ready to do some repairs after you close and before you move into your new home.  Be sure to have a reputable title insurance company involved.  Many bank foreclosed homes have secondary liens that need to be resolved as part of your home buying process.  A good real estate agent will help you navigate these issues.

Sellers Market Limits Foreclosures and REO Inventory

Boulder Colorado and the region have been enjoying a robust Sellers market.  As a result, foreclosures are few and far between.  Here’s the latest on a number of mortgage programs that might be helpful to keep in mind as you seek your next home!

The Fair, Isaac Co Rule Change

I continue to hear dribs and drabs about an impending change that impacts credit score and home buyers. A new scoring model is being release later this year. With little about the proposed rule changes actually known, it is believed those with good credit will see a positive bump in their credit’s buying ability. And conversely, would be home buyers with lower credit scores could find themselves priced out of the ability to obtain financing. Many thanks btw to Just Petaccio with American First Financial for bringing this to my attention.

Whether you are dreaming of how to buy a foreclosed home or just want any home buying opportunity, I strongly encourage you to start the home buying mortgage process early.   Well informed home buyers atop their application process are going to be the Big Winners from this rules change.

Where To Find/How To Buy A Foreclosed Home

I Am Working Presidents Day Holiday

dana briganti loan originator boulder colorado in front of the mountains on a summers day
Premier Mortgage Loan Originator Dana Briganti​ on a summers’s day with the Rocky Mountains in the background.

Premier Mortgage Lender Dana Briganti points out that Mount Rushmore cost $989,992.32 to build.  That’s a little more than a median priced home in Boulder Colorado in January 2020. 

The President’s Day holiday was originally just for the Washington, DC area.  It was the first holiday to honor George Washington’s birthday.  this year, I’ll be working, so if you want to see a home, please give me a shout.   Contact Bob now!

I’m all for holidays these days, I just wish I could use my ski pass on holiday weekends in the High Country!  Still, fun trivia to know!

Mortgage Rates Decline As Coronavirus Spreads

Boulder mortgage lender Michaela Phillips writes in her February newsletter about the impact of the Coronavirus on home mortgage rates.   While the US Stock Market is pricing the illness into the market as a short term blip, lending institutions see it causing a longer term issue. 

Tens of millions Chinese are on mandatory quarantine and unable to get to their jobs/factories/supply houses.  Another forty eight million are experiencing mandatory travel restrictions. It used to be when America slumped, the world caught a cold.  Today it remains to be seen how China’s economy reacts to all of these constraining forces — how that will impact markets long term.

We do already know that international and US home mortgage rates are down on the negative news out of China.   Making it a superb time to examine refinancing options or make that long sought after home purchase!  Ready to get started? Give me shout, Bob Gordon Boulder Realtor!

The Mobile World Conference, in Spain this year, was just recently canceled due to the spread of the Coronavirus.  The MWC is a huge event, well, would have been.   As more events and meetings and even small supply chain providers close to contain the virus, expect to see world GDP decline and home mortgage rates benefit.  If it persists long enough or gets bad enough, it could impact even our housing market and have buyers once more learning how to buy a foreclosed home.

Conforming Home Loans Compared With Jumbo Home Mortgage

Fellow Realtor Sissy Sosner Coldwell Banker Pacific Properties shared a timely eNewsletter this week.  Home buyers, whether you are seeking a distressed foreclosed house or regular run of the mill resale, there are different rules depending upon the size of the home loan.   For those buying with a conforming mortgage, there are options for three to five percent down payment.  Jumbo notes require higher credit scores to qualify (seven hundreds versus six hundreds) and frequently larger down payments.

Understanding whether your new mortgage will be jumbo or not is as simple as speaking with a trusted home mortgage adviser early in the process!

Commerce Home Mortgage Partners With National Diversity Coalition

This is not about how to buy a foreclosed home — there are so few in the metro area just now — but may be the next best thing.  Brian Crowder, a longtime friend and mortgage banker I recommend tells me his firm has negotiated to add new lending programs especially for under-served minorities.   This new program allows for subpart credit scores and can work magic with unique situations – such as marijuana grow operators in Colorado!

Movement Mortgage Pays Off Student Loans

movement ortgage jordan chomko lender head shotAnother great program that is available comes from Jordan Chomko.  I first met Jordan when he assisted a home buyer on one of my listings.  After a solid transaction, he started marketing to me, even sending along a copy of a Dr. Seuss book to make a big first impression. 

He continues to impress with this new mortgage program that allows for paying off student debt in the process of a refinance.  What makes this program really special is that the rate doesn’t increase as it would in a cash-out Refi.

Thank You From Realtor Bob Gordon

Thank you for taking a moment to check out my latest blog.  I’m Bob Gordon, Realtor and Blogger at Boulder Real Estate News.  Check back for updated contact, give me a shout at 303-443-3334 to discuss your home buying needs (I also assist home sellers) and leave a comment below. 

 

 

 

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