My First Foreclosure

Welcome to MyFirstForeclosure.com FAQ Page.

This page will answer many of the questions you may have about purchasing a bank owned property.

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1. Can I purchase a Foreclosed home below market value?

Yes and No! Depending on your financial situation, if you are able to pay all cash for a foreclosure you will stand a better chance at negotiating a solid deal at a lower price. If you are financing a property, you will be competing not just against investors but also other qualified buyers. Remember, the banks know how much their properties are worth and while they may concede on a lower price for some homes, most will sell around current market value.

2. Can I use a down payment assistance program on a bank owned home?

Yes! While some banks do not accept Down Payment Assistance programs, several do. The key to using any down payment assistance program is knowing how to present the offer to the bank. A professional Realtor can help you compose a creative offer which will give you a better chance for success.

3. How long does it take to purchase a bank owned home?

Purchasing a bank owned property will typically take the same amount of time as a regular sale (30 days). However, expect from the start, that there may be delays. Banks holding hundreds of foreclosed properties may be overwhelmed with contracts. Plan for delays ahead of time so there are no surprises when you get into escrow on a property.

4. Will I still have a right to cancel a contract should I change my mind?

Yes and No! Just like any sale, a foreclosure will typically have contingency periods for your loan approval and inspections. It’s important to know these dates as you enter escrow. Should you need to cancel a contract, you may be liable and loose your deposit should you go beyond your contingency periods before canceling. Ask your Realtor how long you have to get inspections & loan approval.

5. What common fees will a bank pay for?

Every property will be different but banks are willing to assist in paying escrow & title fees. The important thing to remember is to ask for a reasonable amount of fees to be paid by both buyer and seller.

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6. Many foreclosed homes are in disrepair, will a bank pay for repairs?

Yes and No! Depending on the situation, a bank may do the repairs ahead of time if the property is in complete disrepair. However, do NOT expect that to happen in every case. Most bank owned homes are being sold “AS-IS”. Ask your Realtor to help you with this process.

7. What kind of financing is available on a bank owned home?

Financing a bank owned property is no different than financing any other property. FHA, Conventional & VA loans are all available for bank owned properties. Talk with your lender about which loan is right for you.

8. Are financing terms the same on a foreclosure as in a regular sale?

Yes! Financing a bank owned property is no different than purchasing any other home with financing.

9. After I purchase a foreclosed home, will I have home warranty protection plan for my investment?

Yes and No! Ask your Realtor to include the request for a home warranty in your offer. Having a home warranty is not required but it will give you some piece of mind should you need something repaired in your home in the future.

10. Is a bank required to comply with standard code enforcement rules in California?

Yes! Code enforcement is still in effect. Earthquake retrofits on water heaters and smoke detectors are common requirements.

11. Are closing costs the same for a bank owned home vs. a regular sale?

Yes! depending on your loan, typical closing costs will run about 3% of the purchase price.

12. Is a larger down payment required to purchase a bank owned home?

No! The size of your down payment is completely dependent on the loan requirements. If you are purchasing a home as your primary residence your down payment may be small than if you were purchasing for an investment rental. Ask your lender what the current down payment requirements are.

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