Two Important Things You Must Know Before Buying a Foreclosed Property



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Buying a foreclosed home can be bittersweet.  If you are not careful you stand to face a great deal of financial risk, not to mention the frustration of wanting and pursuing a home that could be lost to you in the end if precautionary measures are not taken. These steps can and will protect you from unforeseen circumstances that have often come back to bite less-than-careful buyers of foreclosed home.

A Good Deal Can Come At a Steep Price If You’re Not Careful

For all the satisfaction of getting that great deal on a foreclosed home, the single most frustrating thing about buying foreclosures is the inability to communicate directly with the seller.  The purchase of a home is usually the largest financial transaction in many people’s lives and the fear of the unknown should definitely not be a factor.

In normal sales important details must be revealed by sellers through a formal disclosure statement.  The homeowners must divulge any and all information about the home that can impact the buyers’ decision, especially aspects that can affect the property’s value or desirability.  In fact, in many states it is illegal to conceal major defects whether structural or cosmetic, prior to sale.

With foreclosed properties the disclosure statement is extremely limited so the prospect of learning significant financial or personal safety risks in advance is imminent.  Property transactions should not involve a lot of guesswork unless you are able to invest in the property and manage issues that may come up later.

WHAT TO DO TO PROTECT YOURSELF

The amount of money saved on a foreclosed home is worth the extra expense you will have to incur to make sure your dream home is a reality.  Hire an experienced inspector or licensed general contractor that can investigate all aspects of the home in advance.  By weeding out any potential problems ahead of time, you will be able to make an informed decision about the purchase rather than signing the dotted line in the dark.  Major problems such as plumbing and electrical issues, foundation concerns or roof leaks will be investigated and other potential pitfalls that could cost you a sizable amount in the long run will be mentioned.

Since most lenders require a home inspection to take place prior to financing you may be able to utilize the same inspection results by choosing an inspector recommended by your bank.  Though most home inspections average about $300-$350 the cost can go up depending on the size and complexity of the home.  One of the biggest mistakes many buyers commit is to opt for less expensive inspectors with murky credentials or none at all.


Make Sure You Are In the Clear Before Saying “Yes!”

Like with any major financial transaction, there are many steps to take when finalizing the process.  One important step is drawing up a title policy as per the bank’s requirements.  Especially in light of recent tightening of lender practices banks are being extra cautious when processing mortgages.  Sometimes they will require that the title policy be done using a company located outside the local area.  It is essential that you follow through all possible scenarios when confirming the title is free and clear of all liens and/or encumbrances otherwise you risk delaying the transaction while waiting to clear up any mishaps.  You could also potentially lose the sale if the title is not verifiably free and clear.

After your title company has come up with the title policy for your foreclosed home, it’s a good idea to check with a local lien company and request a preliminary report on the property.  This allows a more interactive investigation of the title’s condition as opposed to an out-of-town company doing the legwork. Any outstanding liens that may not have shown up on the out of town title company’s report may appear on the prelim report from the local (second opinion) title company.
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Foreclosures are a great way to get a great house without breaking the bank – and if you play your cards right, there is no reason why there can’t be smooth sailing throughout the process.  With just these two important precautionary measures, you can save years of grief and thousands of dollars of pocket pain – all worth it at the end of the day when you live in your dream home at a fraction of the cost of a conventional sale.

Getting Through a Tax Appeal; How To Request Property Taxes Reassessment



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Now that the holidays are over, what comes next?  It is the beginning of tax season.  And property taxes are no stranger to this time of year.  As expected given the tumultuous past years we have collectively faced after the real estate bubble burst a while back, many homeowners want to make sure they are paying the right amount of taxes on their property.  If you are unsure as to whether your property taxes accurately reflect the current value of your home, you can request the County Board to reassess the current taxes you are paying.


Even though it may sound like a lot of time between now and April 1st, the deadline to submit your application can creep up very quickly, leaving you in the dark with not enough time to prepare.  Here are some valuable tips on how to prepare for a tax appeal request along with some important links that will provide further information on the process.

For Tax Appeal Success, You Need Evidence

Until and unless you provide the board with valuable, viable information that supports your claim to have your home’s value reassessed it likely that you will not be too successful.  The key is providing evidence demonstrating that other, like kind properties in your area have recently sold for amounts that are far less than your current property value.

In the real estate industry agents and other professionals often deal with “comparable sales” reports.  These are detailed reports that derive what the value of a home should be based on other similar homes that have the same profile.  This profile could be amenities, number of bedrooms and bathrooms, square footage, type of structure, type of garage, location, school district – a number of factors.  Realtors aptly perform a comparable sales analysis since they are well versed in the area and have a vested interest in understanding their neighborhoods’ property values. 

Realtors know and understand the ins and outs of such procedures as applying for a reassessment of property taxes.  Both agents are attorneys, for different reasons, offer valuable insight and experience into the process. Important details like the fact that comparable sales must include sales that took place in the year preceding the current tax year and only through October 1st, can be missed if not managed by a professional.  For this reason, it is always a good idea to have that professional backing when you are filing for a tax appeal. 

How Can a Professional Help With Filing a Tax Appeal?

Whether assisting homeowners will filling out the petition of appeal form submitted to the board, coming up with a tax record sheet showing the current assessment on the land and building or establishing the perfect comparable sales data – working with a Realtor (supplemented with an attorney) is ideal.  Not only do your chances of successful reassessment significantly improve but also if there are any roadblocks along the way you have knowledgeable support alongside you.
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If you have decided to pursue a tax appeal, keep in mind that just like filing federal and state income taxes, the closer you get to the deadline the longer it can ultimately take for processing.