(Hawaii News Now) - Buying foreclosures is the topic on today’s Real Estate of Mind. Realtor Kalama Kim of Coldwell Banker Pacific Properties joined us for some tips. Watch the video of his interview and read his bullet points below. The featured listing is a 4 bedroom, 2.5 bath at 87-1781 Mokila Street offered at $429,000.
Buying Foreclosures - We commonly get buyers who ask how they can buy foreclosures and how to find properties that are less expensive.
· There are 3 basic ways to buy properties in the foreclosure process
o Short Sales – where the purchase price is less than what is owed and the lien holders will be asked to lift the lien and allow the sale to occur
o REO – Real estate owned properties where the lender has foreclosed on the property, still own it and now are putting on the market for sale.
o Foreclosure auction properties – where the buyer represents themselves because there is no commission paid by seller or the buyer pays the buyer’s agent out of their own pocket.
· In a market with very little inventory even foreclosure properties command close to market value because multiple offers push the price to market value. Sometime you can get a small discount on Short sales because there are few people who are willing to wait the required time to get a short sale approved. Less buyers and competition mean better prices.
· If you buy at auction it is buyer beware because sometimes there are still liens on the property, there could be people living in the property or the property may not have been open to view so you are buying sight unseen.
· Buyers of REOs need to realize that they may not get the full history of the property because the owner (the bank) has no prior knowledge. There is no Carfacts (using a car metaphor). Also, the REO purchase contract addendums are usually skewed to the Seller so you have very short inspection time frames and may be subject to per diems if you don’t close on time.
· Short sales sometimes don’t ever close when there are multiple lien holders (ie first mortgage, equity loan lien holder, AOAO for outstanding maintenance fees) and they can’t agree on a compromise.
Sample Listing: 87-1781 Mokila Street, $429,000 FS, 4 bedrooms/2.5 bath
Kalama Kim (R), 341-8355
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