Category Archives: Buying Distressed Properties in Kansas CIty

Are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City?

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Are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City?

This is part of a longer blog thread where we are talking about distressed sales in Kansas City, and more particularly in Johnson County Kansas, and what the differences are, and which one is right for you. You can read the first post on this topic here.

As with many things in life, buying a foreclosure deal in Johnson County also comes down to “The Benjamins” – Cash money, financing and/or a combination of both.

Foreclosures

There is a big push for the foreclosures on the market to be purchased by Owner Occupants – people who are going to live there. Many of the government backed foreclosures and or big banks have a special period that only owner occupants can bid on a property. HUD call this the “exclusive” period which varies in length of time but can usually be about 14 days, and Fannie Mae calls this the “First Look Initiative”. During this time, no investors are able to submit an offer, therefore reducing the competition for these deals.

Just because you want to buy a foreclosure, doesn’t mean you can! Lending requirements for different loans have different “condition” requirements. That means, if you can only qualify for an FHA or VA type loan, the house may be in too rough of shape for it to pass the lenders appraisal process. A really good lender can explain all the different loan types available and what you will qualify for, I’m not going to get into that. Important thing to note is to tell your lender that you are considering looking at foreclosures and which loans will work for you.

Short Sales

Depending on the condition of the property the same lending requirements may apply here as well. On of the very biggest requirements in purchasing a short sale is PATIENCE. It can take 77 to 120 days for a Short Sale to close. So be prepared to make an offer, have the seller sign it and then wait for up to 3 months before you even get a response from the bank. It doesn’t mean that people are not doing their jobs, the banks are just that overloaded.

So, are there any particular requirements for me to purchase a Foreclosure or Short Sale in Kansas City? Mainly your financing, whether you are going to live there or not and your time frame are your most important factors.

Where can I find Foreclosures and Short Sales in Kansas City?

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Where can I find Foreclosures and Short Sales in Kansas City?

This is one part of a longer blog thread where we are talking about distressed sales in Kansas City, and more particularly in Johnson County Kansas, and what the differences are, and which one is right for you. You can read the first post on this topic here.

The good news is that by reading this post you are already one step closer to finding the “GREAT DEALS” that foreclosures and short sales have to offer. Actually, if you just look up at the first line – that particular hyperlink will take you to a very special list – a Johnson County Foreclosure list. (Don’t tell anyone!)

I mainly wanted to write this post to warn you of the predators out there that are willing to take your money to offer you something that is pretty much free – well, you may need to provide some contact info – but never your credit card number. So if you have ever stumbled upon a “Get the Hottest Secret Foreclosure List” site and they ask you to pay for it – RUNNNNNNNN!!!!!!!!

Foreclosures – If you are really interested in finding them you can ask your Realtor – I happen to know a good one if you need one 🙂 – and have them run a search in their MLS  (the Multiple Listing Service, the database that all realtors use to market homes for sale) for the terms “REO, BANK OWNED, CORPORATE OWNED, AS IS, HUD, FANNIE MAE, and FORECLOSURE”. This should bring up quite a list of foreclosure properties, and they can set you up on an automatic email that updates you with any new properties as they come on the market.

Short Sales – This one is a little harder to search on your own, but your agent (wink wink) can help you out with that. There is a field in our particular MLS here in Kansas City where if a listing is a potential Short Sale, then they have to disclose it to the other agents. We as agents can search those types of listings or even remove those types of listings from your search.

So, Where can you find Foreclosures and Short Sales in Kansas City? Well, silly, you just did!

What’s the Difference between a Short Sale and a Foreclosure?

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What’s the Difference between a Short Sale and a Foreclosure?

This is a great question and we get asked this a lot.

This is one part of a longer blog thread where we are talking about distressed sales in Kansas City, and more particularly Johnson County Kansas and what the differences are and which one is right for you. You can read the first post on this topic here.

So back to the main question.

What the heck is the difference between a short sale and a foreclosure?

There are two main differences and they all have to do with where in the foreclosure process a property or owner happens to be.

So what is a foreclosure?

A foreclosure is a listing that is being sold by a bank or other entity that has taken back a home that went into default and was unsuccessfully sold at the foreclosure auction. It is vacant and can be in many different level is disrepair. Sometimes these are called “REO’s”. According to Wikipedia, “The term REO originates from the term Other Real Estate Owned (OREO), which is used on financial statements to classify real estate property owned by financial institution but which are not directly related to its business.” Generally foreclosures are much easier to purchase and can close fairly quickly 10-20 days depending on the lender.

So what the heck is a “Short Sale”?

In short (no pun intended) a short sale is an attempt for a seller to sell a home for less than they owe(selling it “short”) on their mortgage balance in lieu of going into foreclosure.

Why would a bank want to do something like this? Why would any bank agree to sell for less than what is owed? Great question! Foreclosures are expensive and banks are in the business of lending money and not owning homes. If a seller is not able to make payments and the house can only sell for a certain amount of money, then the bank may actually save money by accepting a short sale than going all the way to foreclosure.

We will get into this in a later post, but there is nothing quick about short sales and the can take 77-140 days to close. Yikes!

If you want to find out more you can reach out to us and we will be happy to sit down with you and discuss your options. Also, if you know of someone who is behind on their payments and feels like their only option is foreclosure, then they need to talk to us right away. They have option that can greatly affect their future borrowing ability – they do not have to give up.

Till next time!

Buying Foreclosures and Short Sales in Kansas City and Johnson County – What’s the deal?

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Buying Foreclosures and Short Sales in Kansas City and Johnson County KS can be a very  good opportunity for any buyer, and especially in a buyer’s market you can get a two for one value. So what’s the deal? Is there a deal? How do I find them? How do I buy them?

Do you know what you are getting into?

Make sure you know what you are buying before you get too excited about a possible deal.

Great questions! Lets look at a couple key points that I am going to discuss in detail in future blog posts.

  • What is the difference between a Foreclosure and a Short Sale?
  • Where can I find Foreclosures and Short Sales in Kansas City?
  • Are there any particular requirements for me to purchase a Foreclosure or Short Sale?
  • Are Foreclosures or Short Sales right for me?

What is the difference between a Foreclosure and a Short Sale?

There are huge differences and while both can be a great opportunity, It’s important to know what you are getting into. Especially if you have a very strict time deadline. You will find out the “Short Sale” does not mean “Quick Sale”. We will go into that in more detail in our next post.

Where can I find Foreclosures and Short Sales in Kansas City?

You have started at the right place! With Me! DO NOT GO OUT AND PAY FOR A LIST! Just subscribe to this blog or our Facebook Fan Page to get the info hot off the presses.

Are there any particular requirements for me to purchase a Foreclosure or Short Sale?

Yes, depending on if you are going to rent or live, or finance or pay cash.

Are Foreclosures or Short Sales right for me?

We will discuss things like timeline, type of financing, how handy are you? Do you have a little pile of cash to make repairs and make double your money? Are you patient and can wait for the right deal?

Stay Tuned! If you cant wait for the next post, just email me or contract us here.

Kansas City First Time Home Buyer Fears (part 3)

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Can I afford the maintenance?Don't get caught without an inspection!

The third concern of new home buyers in our original survey was “Can I afford the maintenance?” If you missed the prior two posts you can read about Buying in the Right Area and What Happens if Something happens to me financially?

So congratulations! You now own your own home and have the freedom to not worry about what the landlord will say if you paint that wall purple (or Red and Blue). Along with this freedom comes the new “privilege” of home ownership – as my wife like to call it. One of the most scary or stressful things about buying your first home is, even after the inspection, what if something MAJOR breaks down, like the furnace, air conditioner or water heater?

Home Warranties

One way to help mitigate this fear is a home warranty.  The great news about this home warranty is that more times than not, the seller is willing to include it in the purchase of their home. So, if this seller has not kept up on their deferred maintenance you are protected if any of the covered appliances and systems go down for a small deductible as little as $75. We go over this benefit with you in detail during our buyer consultation here at our office.

The Actual Costs

I love my parents! Let me preface this with that, but GEEZ they can scare the BE-JEEBUS out of you when it comes to buying a new home! Everything bad that can happen to your home, will, and will cost you at minimum $5,000 for each event!I know that they are only trying to protect us, but when they don’t like a home, parent’s find it hard to tell you that they don’t like your choice. Instead of hurting your feelings, they often try and scare you with maintenance horror stories.

Here is a list of average costs for upgrades and or replacement costs of most typical projects as a home owner.

Keep in mind, these costs can vary with location, market and even between contractors. It is always advisable to get at least three quotes when planning on spending a considerable amount of money on your next renovation project. We work with many trades and contractors and always keep a list of honest professionals. Let me know if you would like some contractor referrals, I’d be happy to send them your way.

Set Up A Reserve Fund

It is also not a bad idea to set up a reserve fund for maintenance and repairs. A survey showed that a homeowner can plan on spending 1-4% of their homes value per year on maintenance. Keep in mind this is an average over time. Roofs, for instance can be $10-$15k a pop, but they last for 25-30 years if installed correctly. Now in the Midwest, in places like Olathe or Lenexa, you can plan on replacing your roof more often with hail storms, but then your home owner’s insurance usually gets involved there.

So if your home is worth $150k plan on putting $1500 aside a year on improvements and projects to keep your investment running smoothly and by keeping up on deferred maintenance you are saving tons of money in the long run. Go to your bank and have them set up a savings account and label it “Home Repairs” and put in $100 a month into it. If after 5 years you haven’t really needed to use it you may just cap it at that and be okay.

Thanks again for all those who helped put this survey together!

So what crazy DIY projects have you taken on and either surprised yourself with how well they turned out, or did something crazy happen that you can laugh about. Leave a comment below and let us know!

Thanks again for reading! As always, our business is as amazing as it is due to friends and family like you. Without your referrals we would not be here today. Thank you for trusting us with your family and friends!