On the market: Buying foreclosed property
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The biggest mistake most people make when purchasing a foreclosure is getting in over their heads financially, says Leo Nordine, owner of Nordine Realtors in Hermosa Beach.
“If you can’t afford to get a 30-year fixed, you can’t afford the house. I cannot tell you how many houses I have sold more than once because the buyer didn’t do their homework and ended up losing the home to foreclosure two years down the road,” said Nordine, who has specialized in foreclosure property since 1990.
Thinking about buying a foreclosed property? Here are five tips from Nordine:
Know the market. Subscribe to ForeclosureRadar. The map-based system allows subscribers to track foreclosures throughout California and the West Coast with 60 criteria (lender, value and map, for example). The site has a foreclosure learning center and offers a three-day trial (free) or a monthly subscription ($49.95). “You can target properties and look up the sale date and other information,” Nordine says. “You can know about the property details before the listing agent.”
Buy smart. “The cheap stuff is bottoming out. The high end is still going down. So Lancaster is a good place to buy right now because it’s at the bottom. Brentwood, in my opinion, is still going to drop,” he adds. Nordine says South L.A., Riverside, North Long Beach and East L.A. are good bets for foreclosure bargains. “Those are places that are relatively safe for investments, because you are not going to buy and watch the price drop 10% six months later,” he says.
Be prepared to beat the pack. Good foreclosures garner multiple offers, so write a clean “as-is” offer that allows for the seller’s “choice of title” and “choice of escrow.” Sellers are drawn to offers that require less work for them, Nordine says. So be ready to jump through all the hoops. “If the property is owned by Chase, and Chase requires pre-qualification by a Chase loan rep, for example, get the pre-qualification right away. If they want proof of funds or a credit report, have that documentation ready to go,” he says.
Leave emotions at the door. “It is a tough market with a lot of people looking for deals, so it’s easy to get discouraged, Nordine says. “But if you’re diligent and keep trying, you will eventually find a good foreclosure.”
Get the big picture. With fewer disclosure requirements on most foreclosures, Nordine says it’s important to do your due diligence on the history of the house and get information about the property, past and present. Keep an eye out for outstanding liens, loans, fees and tax debts that could transfer and become your own personal post-sale headache.
Here are some foreclosures to watch.
This bank-owned property sold for $595,000 in 2005 and is listed at $294,000. Built in 1988, the lot features four townhouse-style units with a total of eight bedrooms and nine bathrooms in 4,553 square feet on a quiet street. Each unit has a two-car garage, and the area does not have rent control.
1515 Monterey Blvd., Hermosa BeachListed at $589,800, this bank-owned Spanish-style single-family home is a few blocks from the beach. Built in 1930, the single-story home has two-bedrooms and one bathroom in 1,160 square feet and is sold as is.
Built in 1964, this bank-owned duplex is listed at $675,000 and features two units (each with two bedrooms, one bathroom) in 2,236 square feet. Each unit has two floors and large decks with views.
This bank-owned Spanish-style property sold for $875,000 in 2006 and is listed at $379,900. The property was built in 1930 and features four units in a total of 3,167 square feet. The owners prefer cash buyers.
428 Hill St., Unit 10, Santa MonicaListed at $399,000 with Nordine Realtors, this bank-owned, top-floor one-bedroom, one-bathroom condo unit was built in 1973 and features 651 square feet of living space in a 22-unit building located about four blocks from the beach.
226 S. Market St., InglewoodListed at $499,000, the Miracle Theater, a 1937 Art Deco-style movie theater in the heart of Market Street in Inglewood, was recently used as a house of worship but could provide creative space for a community theater, sound studio, event space or club. The building features 6,527 square feet, rear parking for six, 400 seats, a lobby, a stage and a concession area.
360 W. Avenue 26, Unit 101, L.A.
This bank-owned property assessed at $367,000, according to listing broker Leo Nordine, features a two-story live and work loft that’s about four minutes away from downtown L.A. and the Metro Gold Line. The space originally had two bedrooms, but the bedroom walls were removed to create an open plan with 1,280 square feet and two bathrooms. Built in 2006, the loft is listed with Nordine for $251,220.
24471 Wayman St., NewhallThis bank-owned Mediterranean-style home sits in a gated Newhall community and was originally listed at $2.3 million. Built in 1999, the home is listed at $999,000 and has a free-form pool and spa, a huge master suite, a game room, a four-car garage, three fireplaces, and four bedrooms and four bathrooms (plus two half bathrooms) in 4,938 square feet.
-- Michelle Hofmann