Right now there are many great buys in the Spokane market. Before you jump in, take the time to educate yourself about what is available to you. I've provided information below on the process a distressed home may go through, and the opportunities to purchase them along the way.
(If you are a Spokane-area homeowner and you are concerned about losing your home to foreclosure, click here for helpful infomation on what your options are.)
In a pre-foreclosure situation, the homeowner still owns the house but is behind on payments and has been notified that their lender will foreclose if they don’t pay off the balance owed. Buying a home under these circumstances is the stuff of late night, get-rich-quick infomercials. In reality, most of these people don’t want to sell nor do they want people preying on their hardship. (Washington State recently passed a law protecting distressed homeowners, so use caution and consult an attorney if you intend to buy distressed property directly from the owner.) During this time, many homeowners can avoid foreclosure by working with their leinholder to sell the home in a short sale. Otherwise, if they are unable to bring their mortgage current, the lienholder eventually sells the home at a public real estate auction, or Trustee Sale.
Spokane Foreclosure Auctions
Purchasing a home at auction (also known as a Trustee Sale) can be a way to buy real estate at a rock bottom price. However, in order to do so, you are required to have cash or a cashiers check in hand on the day of the auction for the bid amount set by the lienholder. These public auctions are held at the Spokane County Courthouse. You are on your own to research the properties and in most cases you have no means to get inside these homes. In addition to purchasing “as-is, where is” you also bear the risk of additional secondary mortgages, outstanding liens or assessments on the property. In some cases you may have to evict occupants.
Because of the difficulty, risk and up-front cash involved in buying a pre-foreclosure or auction property, most people who are looking for a bargain on a distressed property in Spokane are more likely to buy Bank-Owned, HUD and Short Sale properties. As long as you are qualified, you can purchase them with lender financing.
Spokane Short Sales
A “Short Sale” is a situation where the bank or lienholder may accept less than what the owner still owes on the mortgage in order to avoid foreclosure. Many homeowners are in a situation where their home's value is "upside down" because the market has fallen significantly since prices peaked in Spokane in late 2007. By accepting less than what is owed, the lender can avoid a lengthy and costly foreclosure (see above) and the owner is able to pay off the loan for less than the balance owed. The benefit to the Seller is that a short sale may be less devastating to their credit than a foreclosure. (If you are a Spokane homeowner who may need to sell your home in a short sale, we can help!)
You should expect the offer and response process to take much longer on a short sale, in fact it is common for short-sale transactions to take several months to close. Also, there is no guarantee that the bank will agree to the sale. If you are willing wait it out, short sales can be great deals. We have a good inventory of these homes in Spokane as well. Call or contact us below for a list.
Spokane Bank Owned Foreclosure Properties
Bank owned properties have already been foreclosed upon, and were not purchased at the Trustee Sale so they revert to the Bank or Lender who issued the mortgage. Usually the bank goes through a process to assess the condition, cure any liens, and estimate the market value. Then they list the property with an agent. These are also called REOs which stands for “Real Estate Owned.” These properties can be great bargains. In most situations a bank will be looking for a quick sale, and you may need to be prepared to act quickly to avoid competing offers. There are some fantastic REO buys in Spokane, call or contact us below for a list.
Spokane HUD Homes
A HUD Home is a property that was previously financed with an FHA insured mortgage and where the owner has defaulted on the loan. The lender then forecloses on the home. FHA pays the lender what is owed; and the lender transfers ownership of the home to FHA/HUD. Then, HUD sells it at or below market value.
HUD Homes must be purchased through a “HUD Registered Agent.” (Exit Real Estate Valley is a HUD-registered broker and we are approved agents). Offers are submitted through an electronic bidding process. Call us today for a list of these homes. Depending on inventory and location of these Spokane homes, there can be competition, so you need an agent who can notify you when they hit the market.
In closing, if you decide to buy a distressed property of any type, you should use caution and due diligence and be comfortable with what you are buying. These types of sales are typically offered as-is, so you will certainly want a full inspection. Additionally, all require lender prequalification at the time of offer. We can guide you through the process from start to finish, providing professional representation at no cost to you.
We have access to Spokane Short Sales, Spokane Bank-Owned Properties, and Spokane HUD homes. Call us today at 1-888-852-ACES so we can discuss your objectives and start a custom search. Or, fill out our form below to request distressed property information via email. We do not charge for this information. But we do ask that you work with us as your buyers agent. Our buyer services are 100% free and we are available to show homes seven days a week. When you’re ready to look at some homes, call us and we’ll get you in.
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