Due to all of the hype surrounding foreclosures and the surplus of bank-owned and distress property in our Hampton Roads / Virginia Beach market, many people jump blindly into a search for a foreclosure without all of the facts. Here are a few things to keep in mind about getting a mortgage and buying a bank-owned home.

- A large number of foreclosures cannot be purchase with normal financing.

This means if you’re planning to use an FHA, VA, or Conventional mortgage, you’ll have a difficult time if the property needs repairs. Your agent, if he or she is experienced enough, should be able to tell you if a property should pass an appraisal. Remember – you can never count on a bank to make repairs to a foreclosure or short sale property. They’re sold AS-IS.

- Ask your agent if the property will pass an appraisal.

When you’re financing a property with a mortgage, the lender will order an appraisal to make sure they’re not lending more than the property’s worth. Additionally, the appraiser will be determining if the home is safe, sound, and sanitary. If it’s not, they won’t sign off on the appraisal until repairs are made. Remember when I said foreclosures are sold “AS-IS”? This is the problem. Now you have a property you want to buy, but can’t finance until repairs are made, and the owner (the bank) will not make any repairs, nor will they allow you to pay to have them done prior to closing. You can always ask the bank to make the repairs, but you can’t count on it. Our team has enough experience to tell our clients which properties will be a problem, and give proper advice about what could happen in these situations. Ask us any question about Virginia Beach Real Estate and the Hampton Roads Market here.

Examples of typical things an appraiser will be looking for: Dirty and unsanitary carpets, extreme termite damage, broken windows, large holes in walls and ceilings, exposed wiring, old and leaking roof, etc..

- Financing your foreclosure with a Rehab or Renovation loan

If you find a property in disrepair, and can’t be bought with typical mortgage financing, you can check into a Rehab or Renovation loan. These programs lend money based on a percentage of the total value of the property AFTER repairs are completed. This allows you to have a licensed contractor do the work needed. Keep in mind they don’t pay YOU the money directly, they pay the contractor to do the work necessary. This ensures that the work is actually done and you don’t just pocket the money. A Rehab or Renovation loan is a complicated process, but may work for some buyers who’ve found a great property that just needs to be fixed up. Our mortgage team can give you all the details on Rehab financing, and answer any question you have.

- Cash is still king for properties that need too much work to finance.

It’s rare, but some folks have cash and can get a deal if they look long and hard. There are buyers for certain properties due to the lack of normal financing methods for properties that need repair. If you have cash, you have more options than most buyers.

If you think you may be interested in buying a Virginia Beach or Hampton Roads foreclosure property, above all else be sure you’re working with an experienced agent that can give you the advice and information necessary for you to make an informed decision. Remember – the decisions you make are yours alone. Make sure you’ve got all of the details before you jump in head-first. Contact our team at 757-802-3004 at any time and we’ll guide you through the process, and click the link below to search all foreclosures available in Virginia Beach and Hampton Roads – it’s FREE!

SEARCH ALL VIRGINIA BEACH FORECLOSURES HERE