Yes, we can help! Short sales are increasingly common as new government acts have passed to find alternatives to foreclosures.  You are not alone.  The economy is tough in Boulder Colorado and elsewhere;  people are losing jobs and it’s been a difficult time in real estate as property values have dropped below mortgages owed on homes.  This makes it difficult to refinance and when it’s hard to pay on that mortgage, you find yourself in a dire situation.  Often times if you qualify, a short sale is a better solution that foreclosing.  It’s not as hurtful to your credit and the bank is willing to accept a payment lower that the borrowed amount in order to avoid foreclosure costs.  The Troia Team has written many blogs on the topic so if you feel you are a candidate for a short sale, let us know.  We can help.   Because we have covered the positives to a short sale and explained the process in detail, I wanted to use this blog to provide examples of short sale hardship letters.  These are necessary to submit to a lender when simultaneously submitting the other necessary documents that go along with a short sale request to the bank.  Click here for hardship letter examples.

EXAMPLE ONE:

To Whom It May Concern:

This letter is a explanation of our financial hardship for short sale documentation.

At the time I bought a home, my wife and I were full time employees of long standing companies.  Upon the harsh economic times, lay offs were inevitable and my wife and I both found ourselves laid off.  Not to mention, a baby on the way.  We were unprepared for this unknown fate and as a result, have not been able to make our mortgage payments.

The current market conditions resulted in an under appraised home.  We have both been laid off for almost a year, thus depleting our savings.  Although our efforts to find new jobs has been a full time job in itself, no jobs have become available in this area.  I finally received a  job offer in another state, but the pay is much less and my wife is staying home with our new baby.

I feel certain that a short sale is the best option for us to get out of this situation and hopefully move forward with our lives.

Thank you in advance for allowing us this opportunity to short sale on our home.

Please do not hesitate to contact me and our Realtor who is assisting us in this entire transaction.

Sincerely,

EXAMPLE TWO:

We are writing this letter regarding our property at 123 Martin Road.  Even with the willingness from Bank of America to work with us, we have found ourselves unable to make any more mortgage payments and are behind two months already.  We were a two income family until my husband suffered many medical conditions due to the laborous conditions of his job.  His back ailments have left him unable to work and I can not make enough to support the monthly mortgage payments along with the new medical bills we’ve encountered.  Not to mention our other bills are behind and our bank accounts depleted.

Please accept this short sale offer on account that we are experiencing financial hardship and medical issues.  We would like to downsize to a smaller home near family and rent until our conditions approve.

We have tried every possible avenue to cure our struggles and afford our home, but we are not able to maintain payments at this time.  Please help us avoid foreclosure and accept the attached offer presented by our Realtor.

Regards,

…..Yes, this is a hard action to take and often a short sale is a last resort before foreclosure. The Troia Team of Boulder Colorado is an experienced real estate team and we care about your outcome.  Let us assist you with what we do best.  Contact me for further information.

What is it when a seller’s lender agrees to accept a lower amount for a property than is owed? 

Yes…a short sale. 

This is big real estate news in Boulder Colorado and throughout the country.  If the owner of a home has an outstanding loan/lien that is greater than the value of the home and they are in financial distress (late on mortgage payments), then a short sale is an option other than foreclosure.  Click here to read all about  it.

What you should know…

Finding a Realtor, like the Troia Team, who specializes in the short sale process is crucial.    A short sale is not the best option for everyone.  Also, there is a stack of required documentation and forms, such as the financial hardship letter and financial statement, from the lender.  Realtors should be certified in listing short sales (as we are) because it can be complex as well as emotional.

Getting an answer from the bank can take awhile depending on who the lender is and how far along they are in the process.  Sometimes they will hold several offers for months, then say no (this would be a worse case scenario).  Usually, you’ll get an answer between 2 weeks to 3 months.  The bailout may help this as the government tries to help homes from going to foreclosure.  It will help accommodate the short sale process and time-lines will be faster.

Short sale homes are usually sold as is.  The home may be partially remodelled, then left incomplete due to the financial nature of the situation.  Inspection items are usually not addressed by the bank and many fees like title insurance are paid by the buyer.

Do you meet any qualifications for a short sale?  These include:

1.  Can’t get your home sold in the current market because the mortgage balance is greater than the market value of your home.

2. You are behind on your mortgage payment and facing default or foreclosure.  You know that you can’t afford your mortgage any longer.

3. Facing financial hardship such as job loss, death or illness in the family, need to relocate, divorce, and/or inquiring more bills.

4. Are you depleting your savings to pay your mortgage?

5. Is selling your home an absolute necessity?!?!

Most of the time, a lender would rather short sale than go to foreclosure and the government is now on board.  Call us today to get the support you need and the expertise of short sale listing agents.  We can help.

A short sale is when the real estate sale proceeds fall short of the balanced owed on the property’s loan.  This happens when the borrower is unable to pay their  property’s mortgage.  Instead of penalizing the mortgagor, the lender agrees to sell the property at a moderate loss.   This is an advantage to both parties as  it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. Clients in Boulder ask this all the time and no,  this may not release the mortgagor from their deficiency. Neither foreclosure nor a short sale leaves you free and clear.

Definition made simple of foreclosure: when the borrower is legally removed as owner to their home.  Ownership is terminated due to late payments (default).  The property is sold at a public auction.  Proceeds go to payment of the balance.  When the bank buys the property at the auction, it is then put on the market.

If it’s right for your situation, a short sale would occur before the home goes to auction.  A Realtor lists the home in hopes of selling and presenting an offer to the bank before the sale date.  This date can be extended while the home is listed.  Two basic scenarios: 1) Home receives an offer and the bank accepts = no foreclosure. 2) Property receives no offers or the bank rejects offers = home goes to auction & foreclosure.

CREDIT SCORE

Foreclosure: Can stay on your record for up to 10 years and drastically reduces your credit score 300 points!  vs. Short Sale:  Don’t plan on buying another home in Boulder County (without cash) for two years and the score is lowered about 50 points.

CREDIT HISTORY

Foreclosure: Recorded on public records.  vs. Short Sale: Recorded by mortgage company as “paid”, “paid as negotiated”, “settled in full”.

CURRENT EMPLOYMENT

Foreclosure: Because it is on your credit report, it’s possible for employers to check the information and terminate employment as well.  vs. Short Sale: Not on your report – no indication of loss – no employment termination.

FUTURE EMPLOYMENT

Same as above.  Forclosures on your record are public information to future employers; like a DUI.  They may use their discretion. vs. Short Sale: no record = employers can’t know.

DEFICIENCY JUDGEMENT

Foreclosure: the bank has the right to pursue the deficiency of the loan.  vs. Short Sale: It is possible to negotiate with the lender to give up the right to pursue the deficiency.

DEFICIENCY AMOUNT

Foreclosure: If the home does not sale at auction, it will go through the REO bank system.  This results in a prolonged sale process, resulting in possible larger deficiencies. vs. Short Sale: Because they can be sold at near market value, the deficiency could be forgiven.

My friend is always asking me to “check” my carbon monoxide detector in my house and I said “I do”! The simple answer is,  I look over to see that the red light is still on and that no one is sick yet! Sounds a bit frivolous, but I don’t remember having a carbon monoxide detector in my house when I was little, more less when my kids were little. Any of this sound familiar to you? The scary part is that you usually hear on the news during the winter time about some poor family that perished because of carbon monoxide poisoning and they never realized what hit them.   Colorado’s  Gov. Ritter Jr. signed a new bill May 2009 that requires all existing single and multi family dwellings offered for sale or transfer (after July 1, 2009) to have carbon monoxide detectors.

Bill 1091, Lofgren & Johnson Family Carbon Monoxide Safety Act, was named after Parker & Caroline Lofgren and their children who died while vacationing in Aspen over Thanksgiving 2008, and Lauri Johnson, 23 year old Univ. of Denver grad student who died in her apartment in Jan 09.

The act requires that all new or sold residential properties have Carbon Monoxide alarms on each floor of the property.  Rentals will also be required to add Carbon Monoxide alarms when tenants change.

The safety act requires CM detectors to be located with in 15 ft. of the entrance to all rooms used lawfully for sleeping purposes.  In addition, if the permit is for multi-family rental unit, CM detectors need to be located within 25 ft. of any fuel-fired heater, appliance, fireplace or garage.

There are actually 3 silent killers in your house that you might not be a ware of:

Carbon Monoxide
Radon
Mold

Carbon Monoxide and Radon  are invisible to the naked eye and is hard to detect.  Anytime you suspect water damage, or water infiltration – anywhere in your home,  mold could be there behind or under something, and you don’t realize it.     There are test you can have done for detection and also sucessful remediation for all of them.  When you are thinking about purchasing a bank owned home that has been left unmaintained,  or a total fixer upper, ask your Realtor to put in your contract that you will be having any or all of these test.  You’ll be glad you did, and it will be the best money spent – by you as the buyer  – before buying the money pit.  Click on any of these links to learn more about Carbon Monoxide, Radon and Mold.

eMedicine’s advice on carbon monoxide poisoning everyone should know!

Click on this link to learn more about radon!

Mold detections, symptons and how to get rid of!

Did you know that foreclosure is not the only option to help homeowners struggling to make payments.   The Federal Trade Commission outlines the following options: 

• Reinstatement – the borrower pays the entire past due balance plus late fees and penalties by an agreed upon date.
• Repayment Plan – the lender gives the borrower a fixed amount of time to repay past due payments by adding a portion to the regular payments.
• Forbearance – mortgage payments are reduced or suspended for an agreed upon period of time.  At the end of that time, the borrower resumes regular payments plus a lump sum or partial payments for a number of months to bring the loan current.
• Loan Modification – the borrower and lender agree to permanently change one or more terms of the mortgage contract to make payments more manageable.  Modifications could include lowering the interest rate, extending the term of the loan, or adding missed payments to the principal.  Some lenders may forgive a portion of the debt under the Mortgage Forgiveness Debt Relief Act of 2007.  Check with a tax expert regarding reporting or excluding the income.
• Sale - the homeowner sells the property and pays off the debt.  Some lenders may postpone foreclosure if there’s a pending sales contract or if they know the home is being listed for sale.
• Short Sale – the lender allows a property to be sold for less than the existing loan balance.  A short sale is really a form of  pre-foreclosure and occurs when the lien holder agrees to accept less than the loan amount to avoid the foreclosure process.
• Deed-in-Lieu – with the lenders agreement the homeowner voluntarily transfers property title to the lender in exchange for cancellation of the remainder of the debt.  Although the homeowner loses the home and equity, this process is less damaging to the borrower’s credit than a foreclosure.

• Bankruptcy – personal bankruptcy is the last resort because the consequences are far reaching and long lasting.  A bankruptcy stays on a credit report for 10 years, making it difficult to get credit, buy another home, purchase life insurance, even get a job.  To some this method offers a fresh start to someone who cannot pay their debts.  If a homeowner has regular income, filing chapter 13 may allow them to keep their house.
• FHA and VA Alternatives – homeowners that have FHA or VA mortgages should contact either, www.fha.gov or www.homeloans.va.gov

BEWARE OF SCAMS

• The Foreclosure Prevention Specialist - a phone counselor charges high fees to make phone calls or complete paperwork that the homeowner can do themselves.  Some of these companies use the words HOPE or HOPE NOW in their names in order to confuse borrowers who are looking for the FREE hotline 888-895-HOPE.  Buyers interested in this program go to www.coloradoforeclosurehotline.org.  The Colorado hotline is 877-601-HOPE.
• The Lease/Buy Back – homeowners are deceived into signing over the deed to their home to a scam artist who tells them they can stay in the house as a renter and eventually buy it back.  Usually the terms make the buy back impossible, the homeowner gets evicted and the purchaser walks away with the equity.
• The Bait and Switch – homeowners think they are signing papers to bring their loan current.  Instead, when it’s too late, they discover they have signed over the deed and are being evicted.

Homeowners facing the possibility of foreclosure should be proactive in contacting their lender, accountant and/or attorney to discuss options.  I hope you found this information helpful and I hope I have saved someone from being scammed.  This information was furnished by Land Title Guarantee Company.

We have all been reading and hearing about all the bail out bills and the latest $75 billion to aid homeowners at risk of losing their homes.

I found this clip on CNBC which is entertaining and might be right on.   Watch and tell me how you feel.   See Rick Santelli take down Cramer!

Yes I know…what a deceptive way to attract readers to my Boulder real estate blog but how else do you dress up the process of obtaining an FHA/VA loan in a smooth manner?  In Part I of my blog, Uncle Sam Passes Housing Stimulus Bill , I summarized what the new FHA reform laws mean for all of us when purchasing Boulder real estate using a government loan. 

In Part II, I am recommending 10 steps you can take to help ensure your FHA/VA mortgage experience is VERY satisfying.  Now it may not be as satisfying as sex for most you but I’m sure some of you, unfortunately, may experience the same satisfaction .

Here we go:

1.) Please, plz, puhleese sign and date all forms properly.  Time and time again there are unnecessary delays because signatures, initials, and dates are not properly inserted.  All tax returns and bank statements (all pages should be dated/stamped if provided by bank, online statements must come from a secure site and show the URL, customer name, account number and bank name) must be properly signed.  Self employed buyers must complete IRS form 4506.

2.) If possible keep seller concessions out of the contract.  Any seller concessions paid to the buyer must be toward closing costs or paid directly to third party vendor.  Personal property, money for repairs, etc. can not be included.

3.) Turn in the contract early.  Eager beaver is the attitude to have.  All parties must sign and date the contract and all changes must be made in advance…not at closing! 

4.) Buyers must show two years of work history or related education leading to employment.  Buyers must provide pay stubs and W2s verifying two years of employment.  A job offer letter will not suffice and current pay stubs with 30 days employment is required.

5.) VA loans require a Certificate of Eligibility (COE).  This form is obtained online but working intimately with you mortgage broker may prevent delays.

6.) Provide an adequate paper trail for gifts.  A gift letter must be signed and dated by all parties and include documentation of the transfer of funds.  Cash deposits may require further documentation.  Donors may be asked for bank statements to prove their ability to gift the funds.

7.) Title checks must show the seller’s compliance with FHA requirements.  The seller must have acquired the property at least 90 days before execution of the sales contract.

8.) Make all repairs recommended by inspectors.  Make sure the sellers complete the recommended repairs before closing.  Contact your mortgage rep for details as the required inspections vary by state.  Some inspectors can be very anal.

9.) Be prepared to provide all documentation.  To ensure a smoother transaction, advise your buyers to respond promptly to all requests.  The amount of documentation required will vary depending on each buyer’s profile.

10.) Be available throughout the process.  Buyers should keep in contact with their mortgage rep during the process and be available several days after the scheduled closing date.  Please refrain from going on vacation or setting appointments with movers, contractors, etc.

Suddenly I feel like I need a cigarette….

The Housing and Economic Recovery Act of 2008 was made official on July 30, 2008.  This housing stimulus bill passed the House and Senate by overwhelming numbers and President Bush was quick to follow suit.  Hopefully these changes will help jump start the slumping housing market but some feel it is too little too late.  Regardless, there are still many home buyers who need affordable homes and FHA financing is one of the most popular means to obtain a mortgage loan.

If you are wondering what an FHA loan is it is a loan insured by the Federal Housing Administration (FHA) and made by an approved lender in accordance with the FHA’s regulations.  FHA requires that the property being purchased meets certain minimum standards.  This mortgage may be easier to qualify for than a conventional mortgage, but it also has a lower maximum loan limit that varies depending on the average cost of housing in a given region.  FHA loans require the borrower to pay mortgage insurance premiums (MIP) if the down payment is less than 20%.  Fixed and adjustable rates are available with FHA loans.

If you are considering an FHA loan, please remember FHA loans do take longer to process than conventional loans and the current average days to close is 35+ days.  Also, FHA inspectors are more finicky when it comes appraisal time and there may be two inspections required for the property.  This may be an important factor if you plan to buy a bank owned property which may have one or more inspection issues which could define if the property is considered habitable.

What does this mean for you if you plan to obtain FHA financing?  A few key points of the bill are: 

1.)  Home buyer tax credit -  a $7,500 tax credit which would be available for any qualified purchases between April 8, 2008 and June 30, 2009.  The credit is repayable over 15 years making it an interest free loan rather than a tax break or credit.

2.) Seller funded down payment assistance programs – existing FHA proposal to prohibit the use of down payment assistance programs funded by those who have financial interest in the sale, does not prohibit other programs such as nonprofits, churches, employers, or family members.  Say goodbye to Nehemiah, Genesis, AmeriDream , etc. for FHA loan assistance.

3.) Down payment requirement on FHA loans will increase from 3% to 3.5%.

• GSE Reform – including a strong independent regulator, and permanent conforming loan limits up to the greater of $417,000 or 115% local area median home price, capped at $625,500. The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).  Click the link below to obtain limits in Boulder, CO.
  View 2009 FHA and GSE loan limit estimates (PDF)

• FHA Reform – including permanent FHA loan limits at the greater of $271,050 or 115% of local area median home price, capped at $625,500; streamlined processing for FHA condos; reforms to the HECM program, and reforms to the FHA manufactured housing program. The down payment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is immediate upon enactment, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).  Click the link below to obtain limits in Boulder, CO.
  View 2009 FHA and GSE loan limit estimates (PDF)
  FHA Reform Chart (PDF)

• Home buyer Tax Credit – a $7500 tax credit that would be would be available for any qualified purchase between April 9, 2008 and June 30, 2009. The credit is repayable over 15 years.
  First-time home buyer tax credit chart
  Frequently asked questions about the first-time home buyer tax credit

• FHA foreclosure rescue – development of a refinance program for home buyers with problematic sub-prime loans. Lenders would write down qualified mortgages to 85% of the current appraised value and qualified borrowers would get a new FHA 30-year fixed mortgage at 90% of appraised value. Borrowers would have to share 50% of all future appreciation with FHA. The loan limit for this program is $550,440 nationwide. Program is effective on October 1, 2008.
  FHA Foreclosure Rescue Chart

• Seller-funded down payment assistance programs – codifies existing FHA proposal to prohibit the use of down payment assistance programs funded by those who have a financial interest in the sale; does not prohibit other assistance programs provided by nonprofits funded by other sources, churches, employers, or family members. This prohibition does not go into effect until October 1, 2008.
  More about the seller-funded down payment assistance provision
  Tips to finding down payment assistance programs (PDF)

• VA loan limits – temporarily increases the VA home loan guarantee loan limits to the same level as the Economic Stimulus limits through December 31, 2008.

• Risk-based pricing – puts a moratorium on FHA using risk-based pricing for one year. This provision is effective from October 1, 2008 through September 30, 2009.

• GSE Stabilization – includes language proposed by the Treasury Department to authorize Treasury to make loans to and buy stock from the GSEs to make sure that Freddie Mac and Fannie Mae could not fail.

• Mortgage Revenue Bond Authority – authorizes $10 billion in mortgage revenue bonds for refinancing sub-prime mortgages.

• National Affordable Housing Trust Fund – Develops a Trust Fund funded by a percentage of profits from the GSEs. In its first years, the Trust Fund would cover costs of any defaulted loans in FHA foreclosure program. In out years, the Trust Fund would be used for the development of affordable housing.

• CDBG Funding – Provides $4 billion in neighborhood revitalization funds for communities to purchase foreclosed homes.
  More about the CDBG funding provision

• LIHTC – Modernizes the Low Income Housing Tax Credit program to make it more efficient.

• Loan Originator Requirements – Strengthens the existing state-run nationwide mortgage originator licensing and registration system (and requires a parallel HUD system for states that fail to participate). Federal bank regulators will establish a parallel registration system for FDIC-insured banks. The purpose is to prevent fraud and require minimum licensing and education requirements. The bill exempts those who only perform real estate brokerage activities and are licensed or registered by a state, unless they are compensated by a lender, mortgage broker, or other loan originator.

Stay tuned for my next blog on 10 steps you can take to ensure a smoother governmnet loan experience!

When purchasing a home it is very important to have the home inspected for possible issues that might come up in the future. Many people do not realize the importance of a home inspection until it is too late.  But there are other reasons to have a home inspection done especially when you are dealing with REO or Foreclosure properties or properties that are being sold “as is”.   A home inspection can be used as another negotiating tool for buyers.  Lets say the home needs plumbing repairs but you are a licensed plumber and can do the repair work on your own.  You can negotiate with the seller or Bank a lower price in lieu of repair work being done to the property.  This is a great way to save additional money on your overall purchase price when there is simple work that can be done after the property has already closed. 

 I have had REO/ Bank owned properties reduce the price over 10,000 to compensate for repair items.  Most sellers including banks and lender owned properties would much rather take a reduction in price than have to pay to have work done on a home.  The most important thing to remember if you are negotiating a new price per inspection items is NOT GIVE THE INSPECTION REPORT TO YOUR LENDER.  Buyers never give an inspection report to your lender or your underwriter.  This can cause all kinds of problems with obtaining your financing.  Especially when you are dealing with Bank owned or Lender owned properties.  Also when dealing with HUD properties that are sold “as is” make sure if you have a home inspection done it is not given to your lender.  The lender can require that repairs be made prior to your closing on the property.  This is fine if the seller agrees to the repairs but if the seller does not agree or if the seller is HUD, repairs cannot be made to a property prior to closing. 

Giving an inspection report to a lender can cost you the deal so don’t let the cat out of the bag if there are inspection issues and you still want to purchase the home make sure that you are the only one who knows about it.  Also if you are obtaining financing through an FHA loan make sure that you are not going to have inspection issues come up.  If you are unsure about the property condition I would recommend trying to obtain a conventional loan instead of FHA.  FHA loans have specific guidelines and if the property condition does not fall within these specific guidelines your lender may not be able to finance the loan.  All of these guidelines are regulated through Fanny Mae and Freddie Mac so they are universal lending guidelines. 

Be a smart buyer do not let the cat out of the bag.  If you find inspection issues and still want to purchase the property do not share that report with anyone ask for a price reduction or terminate your contract do NOT GIVE IT TO YOU LENDER because it can cost you the loan and make sure to not use FHA financing unless you know for sure that you will not have any inspection issues on the property.

If you are purchasing property these days I’m sure that you have stumbled upon a REO or lender owned/ bank owned property in you’re searching.  Here are a few tips for placing an offer on a REO/Bank owned/ Lender owned property.

1. There are usually multiple offers on the table, this means the bank representative, usually called the asset manager will be looking at all the offers and decide on the highest and best offer for the bank.
2. The highest and best offer does not always mean the highest priced offer.  For example if you are financing the purchase through the bank who owns the home the bank will sometimes take a lower sale price offer because they will make more in interest on the loan than a low cash offer even if it can close faster.
3. The bank is not always in a hurry to close these properties on average 45 days is the usual time frame to close on a REO/ Bank owned property.  Make sure you talk to your agent and get a realistic time frame of how long it will take to close on the property you are interested in.
4. Most banks sell the property “as is” I would suggest making sure that you are willing to purchase the property in an as is condition before you place the offer.
5. If inspection items to come up I would ask the bank for a credit towards the purchase price or closing costs the asset manager/ bank representative does not want to spend any additional funds on the property to get it closed.
6. Also if you are asking for inspection items to be resolved make sure that you ask for a price reduction on an amend/extend instead of an inspection notice. Otherwise if you are financing the purchase your underwriter might ask to see the inspection report.  If there are items on the inspection report that the underwriter decides need to be fixed these items must be taken care of prior to closing on the property.
7.  Make sure you allow yourself plenty of time to do your inspections.  The bank does not have any records about the property since they never lived there so make sure you inspect every item in the property so you have as much information about the property as possible.  If major items come up on inspection I would recommend terminating the contract because the bank is not going to take care of those items they would much rather sell the property at a lower price to someone who is willing to buy it “as is”.
8. The most important item in making an offer on a REO/Bank owned property is you must be realistic in your offer.  The bank knows what the home is really worth most of the time they have a state appraiser look at the property before they put it on the market.  Also the bank has a certain amount of money that they need to get back from the sale of the property.  Just because it is another foreclosure does not mean that they are going to give the home away.
9. Make sure if you are buying a bank owned home you are working with a Realtor who has experience selling bank owned properties.  I would recommend having a buyer’s agent represent you.  A buyer’s agent will help you through the process of purchasing a home manage the sales process for you and help you avoid problems.
10. Be patient, I know I said it before but bank owned properties can take a while to close.  Make sure that you have plenty of time to move into your new home and you have a place to live before you move. This can be hard to coordinate so make sure you plan ahead and your might want to come up with a temporary residence if you are waiting on your new property to close. Also it is not a bad idea to have a backup home in mind just in case something major comes up on inspection.  Sometimes it can take several weeks to hear back about offers and inspection items.
11. Just because it is bank owned does not mean it is the best deal on the market. As I said before in a previous post bank owned homes are not always the best deal.  It is not always worth getting in a bidding war with several other offers.  After you do your homework and check the comparable sales history for a neighborhood make your offer based on fair market price and not your emotions.  Making an emotional purchase can cost you big money in the long run.
12. The best tip I can give you is to be informed make sure that you are diligent about inspecting the home.  Make sure that you are paying fair market value for the home, do not make an emotional purchase! Also be patient it just takes a while, so make sure you have a place to live and don’t get upset if the property does not close on time.

Don’t get burned, there are great deals out there but be a smart buyer and make sure that you are getting the best value on the market.