Go Buy a Foreclosure in Florida in 2014 !

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In the last 45 days I have helped three customers purchase a foreclosure. This is surprising to me because I am the guy who posted on Trulia, “Why You don’t want to Buy a Foreclosure”  in 2013.

In between 2013 and 2014 it appears the landscape has changed a little for your average foreclosure seeker. Definitely for the better.

In 2013, approximately, two out of three transactions in Florida were cash. I can’t tell you how many borrowers that I spoke with actually gave up looking for a house because they were always getting trumped by a better offer. A cash offer from a private investor.

In Broward County some listings actually stated flat out “No FHA”. There was even an instance where the listing agent had the nerve to say that they would not let you look at the home until you made an offer by means of a contract. That’s insane.

This year we are seeing better fair market conditions. Fair market conditions that include less cash purchases by private investors and more chances for your average Joe and Betty borrower trying to get a deal on a foreclosure.

 In 2013, banks selling foreclosures were laughing at contracts submitted for FHA. Not this year.

Even the contracts being accepted has changed. (This is a note for buyers)

Things to Look out for:
1.) Excessive fees like having to pay doc stamps on the deed
2.) penalties for a late closing
3.) Too many repairs to the property
4.) Title companies in India!

Usually a foreclosure contract will require doc stamps on the deed paid by the buyer and many have severe penalties for loans closed after the contract date. Doc stamps on the deed are .07 times the purchase price, a considerable fee. The penalty for arriving at closing is usually $100 a day. On the last three foreclosure purchases I finished, I did not see any type of these one sided fees.

In each case the house was in good shape. If the house is in disrepair my bank will not let you do conventional financing or FHA financing. If the cost to cure is over say 5% they will make you do a streamline 203K rehab loan that allows you to fix up to $35,000 in upgrades. This loan will take longer but you can do it.

This is important to remember when looking at foreclosures because the bank holding the property usually will not work with you if things need to be fixed on the property before you can close.