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Hints
To
Make Your
Distressed Property
Purchase Successful
LOAN
QUALIFICATION OR PROOF OF FUNDS
Typically at the
time you submit a written offer, you will
need to also attach a loan
pre-qualification letter from your
lender, or if a cash offer, a proof
of funds letter from your bank or
where you are obtaining your cash.
Contact your lender now, if you are
considering purchasing a distressed
property.
EARNEST
MONEY CHECK
Depending upon the property, earnest money
can vary from 5% of the purchase price of
more. The seller will determine
whether a personal check can be submitted,
with a Cashiers Check attached at a latter
date. Regardless, you must have
verifiable funds in the checking account.
Some institutions require funds in the
account for a minimum of 60-90 days and want
a paper trail of funds. The days of
grabbing funds from under the mattress are
presenting as an offer are long gone! So if
you are planning to purchase and are
transferring funds, you should do so now.
CASH VERSES FINANCING
OFFER
Financial
institutions want to sell foreclosed
properties as soon as possible and with
ease. Cash is know as an easy "Done
Deal". Many times a cash deal will be
accepted over a loan, even it the cash offer
is actually a lesser amount. Many Pagosa
properties under $200,000 are cash
purchases. It is common that as many as 10
offers are being submitted to the deed
holder and buyers are requested to submit a
"Best & Highest " offer.
A foreclosed property can be under contract
quickly, so if you are interested in
purchasing - Make An Offer immediately! Institutions
can require a cash sale to close within 30
days and loan financing within 45-60 days
from the execution of contract.
INSPECTIONS
Unlike most
properties, foreclosed properties are
typically purchase "AS IS, WHERE IS", and do
not have a Seller's Property Disclosure.
The owner of the deed may give the
prospective buyer seven days upon an
executed contract to perform a home
inspection (at the buyer's expense). Most
foreclosure addendums do not allow or
provide for items to be repaired and usually
over ride the standard Colorado Real Estate
Commission contract (originally submitted).
This is especially important on homes in
Pagosa, as many foreclosed homes have been
"winterized". In summary, the buyer
will usually have items to repair or they
may withdraw their offer (within the
deadline). In addition to a home
inspections, it is recommended that other
inspections should occur by professionals
(such as heating and plumbing, water, well
or cistern, electric, surveys, and
appraisals), just as you would for any real estate purchase.
More Questions?
Give Wen Saunders
a call at 970-903-0038 and
she will be happy
to answer questions about distressed
sale purchase.
If she doesn't
know the answer, she can certainly point you
in the right direction!
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