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JOE GIANCARLI
(609) 658-2612
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Should you Purchase a Bank-Owned Property?
(one that has gone through foreclosure)
First, sign up for my Free Foreclosure Finder Service.
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There are some basic misconceptions about REOs
and their value as a New Jersey real estate investment.
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An REO (or "other real estate owned") has been foreclosed upon by a lender and is now owned by the bank or mortage company.
Basically, the homeowner could not make the mortgage payments.
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| Pros |
Cons |
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1. The bank will clear any liens, evict tenants, and clean up the title for transfer to a buyer.
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1. The property is sold "as is."
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2. Banks do not want to own property. They want to find a buyer.
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2. Normally the buyer will receive no disclosure of known defects.
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3. Banks have no emotional attachment to the real estate. They deal in facts and market value.
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3. It is not a way to make easy money.
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4. Deal from strength. Know how much the repairs will cost and the comparable sales.
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4. The buyer will usually be responsible for any and all repairs.
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5. There is plenty of inventory now in New Jersey. You will have a wide range of choices in REO properties.
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5. Time for inspections may be limited.
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The days of "steals" are fast disappearing as banks try to minimize their losses.
Try these strategies to help your bargaining position:
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• Offer a quick close, 10 days if possible. Prepare a plan to do this.
• Pay cash if at all possible.
• If you need financing, be Pre-Approved before you make an offer.
• Don't try to use your VA eligibility.
• Make a clean offer - don't ask the bank to pay your points or costs or repairs
• Keep contingencies to a minimum. Have your inspections done before the offer.
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| Points to Consider when Buying a NJ Foreclosure |
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• You can't be in a hurry. The approval process can take many weeks.
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• If you are planning a 1031 Exchange and using a REO as the replacement property, keep the long time frames in mind.
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• If you are not skilled at making repairs or remodeling, be sure and include the costs of construction professionals to inspect and repair, in your estimate of net proceeds.
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• More than almost any type of real estate transaction, the Buyer of a foreclosure in New Jersey needs an experienced and well-informed Realtor on their team.
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• I can give you both a market analysis and locations of properties
which will suit your investment plans.
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Contact me today.
Joe Giancarli REALTOR®
jgiancarli@remax.net
609-658-2612
Click below to find homes for sale in:
Allentown, Bordentown, Burlington County, Burlington Twp, Chesterfield, East Windsor, Ewing,
Florence, Hamilton, Hopewell, Lawrence, Manalapan, Mansfield, Mercer, Plainsboro, Plumsted/New Egypt,
Robbinsville, Upper Freehold, and West Windsor.
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