Foreclosure Inventory & Condition
With the recent spike in Huntsville Real Estate foreclosures, inventory in the Huntsville area has increased and you are likely to run across some of these homes in your search criteria. Thus you should be prepared to make an evaluation of the various situations you may encounter and determine whether you would be interested in pursuing them further.
The one thing you should inspect when considering foreclosure properties is the current condition of the home. Many properties that go into foreclosure are missing fixtures, appliances, cabinets, etc. Stuff that is removable and worth money is often times disappearing before a home goes fully into foreclosure not to mention the cosmetic updates that may be needed such as carpet, flooring, painting, and general repairs. Also beware these homes are almost always ‘Sold-As-Is’, thus the purchaser is responsible for their resolution and many financing options require their resolution prior to closing.
Owner Occupied Fixer-up Financing
However there is a unique mortgage plan that can be very useful in these situations: FHA’s Streamline 203(k) Mortgage. This mortgage option allows owner/occupant home buyers to finance up to an additional $35k to improve or upgrade their home prior to moving in.
- A FHA approved inspector appraises the home’s value assuming the repairs are done
- A repair escrow is established at closing to provide repair funding
- The contractor or home owner can drawn on these funds as the repairs are made
- The home owner has up to 6 months to complete the agreed upon repairs
This is of course a short summary of a process which is much more detailed so be sure to visit the FHA website for all the details and eligible repairs.
Searching the MLS for Foreclosures
Searching our local Huntsville MLS for foreclosure properties is not a very straight forward process, requiring the use of explicit string searches within the entire listing detail and comments. Thus it also at times brings up a few false positives and takes a bit longer to execute. Nonetheless it can be done with the following custom searches.
Short Sales
These are homes that are in a pre-foreclosure status and are often the most difficult to work with. The Short Sale connotation indicates that the listing price is below the current mortgage payoff and will require third party approval. These homes are not yet Bank Owned and the third party in most of these cases is not yet motivated to accept losses on their assets. So often the listing price on these homes is virtually meaningless.
Huntsville Short Sale Homes For Sale
Bank Owned & Right of Redemption
These homes are fully into foreclosure and often times the owning Bank is eager to remove nonperforming assets from their balance sheet. However, in some of these cases the original home owner has a first right of redemption option which would allow them to re-take possession of the property with certain financial payments on their part. So the best bet is to isolate foreclosures where there is no first right of redemption option or it is very near its expiration.
Huntsville Bank Owned Homes For Sale
Huntsville Right of Redemption Homes For Sale
HUD Foreclosures
These are Government owned foreclosures that require special bidding efforts by the potential home owner.
