Tips & Tools : buying

Do Your Homework Before Buying A Foreclosure Property

RE.com Tips & Tools — Tue, 03 Nov 2009 16:18:00 GMT

EDITOR'S NOTE: With foreclosure properties still dominating the housing landscape in the U.S., we've asked our friends at RealtyTrac® to guest author some articles to shed light on the foreclosure crisis. RealtyTrac is the most trusted source of foreclosure information in the country. We hope that the information provided here and in other articles will be beneficial to understanding, avoiding and even leveraging (as an opportunistic buyer) home foreclosures.

By Rick Sharga, Vice President of Marketing for RealtyTrac

There are two words that give pause to the most motivated foreclosure buyer: due diligence.

Those words mean researching all the risks involved in a property purchase, which in the past meant extensive legwork and expense. But that’s no longer the case, thanks to exponential advances in information technology and the establishment of Web-based property data aggregators like RealtyTrac.

Don’t be fooled – buying a foreclosure property doesn’t equate to easy money by any means. A savvy player in this market is willing to do a bit of homework. But the tools and resources needed to do that homework are much more accessible now than ever before.

"While buying a foreclosure property is certainly not without risk, the right examination and due diligence on the part of buyers can significantly improve their ability to make a strong investment," explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace.

Web-based services like RealtyTrac can help investors and homebuyers tap into the previously hidden foreclosure market by providing access to property data formerly available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal.

It makes sense to give any foreclosure property under consideration a thorough examination – possibly even more thorough than for a traditional real estate property. There are three stages of foreclosure that require different research strategies: pre-foreclosure, auction and bank owned.

Before buying a pre-foreclosure property directly from the owner, run a preliminary title check for all debts secured by the property. You can research the title online using RealtyTrac’s Legal and Vesting Report or Transaction History Report. Subtract the total amount owed from the estimated market value to determine the potential bargain. After making contact with the owner, arrange a walk-through of the property to evaluate its condition. Factor estimated repair costs into your purchase offer. Before you close the deal, hire a professional home inspector to inspect the property and enlist a title company to run a final title check.

In most states, you don’t have a chance to inspect a property before buying at a public auction, which makes this type of purchase more risky. But if you’ve researched the title and determined the amount owed is far less than the market value, you’ll have some margin to cover unexpected repair costs. Before you go to the auction, set a maximum bid based on your research and stick to that bid at the auction.

Although you’ll be able to inspect the property if it’s bank owned, the bank typically knows little about the property and will sell it in “as is” condition. This means the bank will disclose all the needed repairs it knows about, but is not held responsible after the sale for any repairs it did not know about. Factor the known repairs into your purchase offer and have a professional inspection conducted before closing the deal. You should also have a title company run a final title check before closing, although most banks will make sure the title is clear before selling.

Here are eight steps for doing a professional-level property examination for all stages of foreclosure:

Identify desirable neighborhoods – Find specific neighborhoods where you would like to live or own a home. This will limit the search to a manageable size for you and your agent, and give you a sense of relative property values.

Cast a wide net – There are a number of Web-based services like RealtyTrac that can put hundreds of thousands of foreclosure properties at your fingertips. But remember, the best savings are often found in pre-foreclosure properties; therefore, it’s important to check the percentage of pre-foreclosure (vs. REO) properties in any database before subscribing.

Determine the property value – Look at the original purchase price and recent comparable property sales to determine the current value of the property. You can obtain information on recent sales in the area via Multiple Listing Service (MLS) comps from your realtor or by ordering a report such as RealtyTrac’s Comparable Sales Report. Ideally, you should look at comparables sales in the area over the past six months. Then you can drive by each property on the list of comparables and note its condition, size, appeal and location. You should also look for properties that are currently listed for sale in the area and research the same information for them. From this information, you can get a good idea of what the property you are interested in is worth.

Find out the amount in default and the remaining loan balance – In order to determine a reasonable offer price, you’ll need to know – at a minimum – how much money it will take just to satisfy the debt to the lender. This information is available on the foreclosure documents filed by the foreclosing lender and from online foreclosure-tracking websites like RealtyTrac.

Check for other liens – Before purchasing any foreclosure property, make sure it is free and clear of any bankruptcies, tax liens or other financial liabilities. A title search will examine records used to determine the legal ownership of the property and all liens and encumbrances on it. A title company or attorney can run a title search for you. You can also research the title online using RealtyTrac’s Legal and Vesting Report or Transaction History Report.

Assess the condition of the property – In addition to visiting the property yourself, hire a professional inspector to inspect the property to make sure that the property is in acceptable condition, or to determine how much of a rehab budget you’ll need to build into your deal. If you buy during pre-foreclosure or directly from the bank (REO), it’s usually possible to conduct a thorough inspection. But if you buy at the public auction, it may not be possible to view or inspect the property beforehand.

Build a positive relationship with the seller – Before purchasing a property, try to make sure that you’re entering into a win-win situation with the seller, so that they’ll be more willing to do what they can to make the process easy and leave the property in good condition for you.

Leverage your timing – Knowing when a property is going to be auctioned gives you an extra bargaining chip when negotiating with a seller or a lender. You can sometimes contact the seller just before the auction to see if a last-minute sale is possible. At the very least, knowing the intended date can help you organize time to research the property as much as possible, review comparable sales, calculate values and potential profits and ultimately determine a bid price so that you’re well prepared to compete with other investors on auction day.

It’s sometimes said that in real estate, selling is about business while buying is controlled by emotion. While this may generally be true, it’s important to keep your head about you and think through the process so that you can make the most informed decision possible. Remember, a little preparation before the sale can help you reap huge benefits. So, it’s worth your time and energy to do a little homework!

Foreclosure Auctions: Beware of Hidden Costs

RE.com Tips & Tools — Tue, 04 Aug 2009 14:44:00 GMT

By Jim Saccacio, RealtyTrac Chief Executive Officer

If you buy a property at a foreclosure auction, you may end up forking out more than just the winning bid amount to own the property free and clear. That’s because some debts attached to the property — called liens — survive the auction and carry over to the new owner. Foreclosure auctions provide some fantastic opportunities to purchase a property well below its market value as long as you’re familiar with the ground rules. One of those ground rules is to never bid on a property unless you’ve researched the title and are aware of any liens that you will have to pay off if you are the winning bidder. Although most liens are cleared by the auction, that’s not always the case, according to national real estate speaker and author T.J. Marrs.

“Although it may vary from state to state, for the most part all liens except property tax liens are cleared by the foreclosure process,” he said. “Other than the property tax lien, the first mortgage lender is likely to receive first funds produced from the auction. Any remaining funds would then go to the second lien holder, third lien holder, and so on. Even the IRS is secondary to existing senior lien holders.”

The order of the liens is determined by the date those liens were recorded. If a second lien holder forecloses on the property, the first lien will typically survive the auction and the winning bidder will need to pay off that first lien amount to own the house with a clear title. A clear title is needed to resell the property. Furthermore, the winning bidder could be foreclosed on if the first lien amount remains unpaid after the foreclosure auction.

Researching the Title
The majority of foreclosure auctions are conducted by the lien holder in the first mortgage position, but you need to check if that’s the case for any property that interests you. And you need to check if the property has any current property tax liens recorded against it since those also survive the auction. You can find any liens recorded against a property at the local recorder’s office, through a local real estate agent or online through property data aggregators like RealtyTrac, which compiles lien & loan history information for auction properties nationwide. This research will allow you to determine the current state of the title and the position of the lien that will be up for auction.

You should enlist the help of a local real estate agent or real estate attorney if you’re not comfortable researching and interpreting the title information yourself. You can also ask the trustee in charge of the auction if the lien being foreclosed is in the first position or if it is “subject to” other liens.

If you’re interested in an auction property with property tax liens or other liens that will survive the auction, either avoid the auction altogether by working out a deal with the owner in default or make sure you account for those other liens in your bidding. To determine your maximum bid, Marrs recommends subtracting the amount of any liens that will survive the auction from 70 percent of the property’s market value to come up with your maximum bid amount.

Here’s an example for a property with a market value of $200,000 and a property tax lien of $1,500:

$140,000 (70 percent of market value)
- $1,500 (property tax lien amount)
= $138,500 Maximum Bid

But if that same property had an additional lien of $50,000 not cleared by the foreclosure auction, your maximum bid would be a lot lower:

$140,000 (70 percent of market value)
- $1,500 (property tax lien amount)
- $50,000 (surviving lien amount)
= $88,500 Maximum Bid

You should be willing to invest the time and money it takes to assure once and for all that the property you are bidding on is worth what you think it is. Any investment you make in research is miniscule compared to the potential risk of assuming unknown liens on a foreclosure property.

The Ins and Outs of Bidding and Paying at a Public Foreclosure Auction

RE.com Tips & Tools — Mon, 03 Aug 2009 13:24:00 GMT

By Rick Sharga, RealtyTrac Vice President of Marketing

In the fast-paced foreclosures market, many sales are made at public auctions. While attending auctions can be a great way to purchase a property well below its market value, the process moves rapidly and can sometimes seem like a dizzying blur to the prospective buyer. These events are often frequented by more seasoned buyers and investors who understand the ins and outs of the process, so you need to be prepared if you plan to attend an auction. That means understanding the auction process before you arrive, including how to make a bid and actually pay for the property if you bid successfully.

Real estate investment trainer and author T.J. Marrs says he rarely frequents auctions and prefers to buy during the pre-foreclosure period whenever possible, simply because of the growing number of bidders driving up the prices at auctions. However, he advises those who do plan to buy at auctions to "get to know the property by either personal inspection, professional inspection or by getting as much background information on the property as possible." Those who heed that advice and take time to understand the foreclosure auction process have a better chance of achieving a successful outcome.

First things first: Know when and where, make time to prepare
While the details concerning public auctions differ from state to state, and whether the sale is judicial or non-judicial, usually foreclosure properties are auctioned off at the site of the property or at the courthouse in the county where the property is located. The date of a scheduled auction is typically posted at the courthouse, at the actual property and in a local newspaper.

Thanks to online data services like RealtyTrac, buyers and investors can use the Internet to locate auction property nationwide. RealtyTrac maintains a daily updated list of sale notices nationwide along with property research tools, giving buyers the information they need to prepare for an auction. Buyers can find the street address, which gives them a chance to view the property (at least from the outside), evaluate the neighborhood to determine what the property is worth, and plan a reasonable amount they would be willing to bid for the property at the upcoming auction.

Most likely, you’ll be bidding on a property without really knowing its condition on the inside, so it’s important to do any research you can in advance in order to minimize the risk of over-bidding and increase your return on investment. It’s also a good idea to research the title on the house and to find out what you’re actually bidding on at the auction, such as whether it’s the first mortgage or second mortgage. This information is crucial to bidders because it affects whether liens will remain on the property or dissolve as a result of the foreclosure auction.

“You have to know the property inside and out and know the party that is auctioning the property is, in fact, in the first lien position,” advises Marrs, noting that if you buy from a party that is in a secondary lien position, you could be responsible to pay for the first lien in addition to the auction price.

Game Day: What to do
The morning of the auction, it’s a good idea to contact the lender’s representative to confirm whether the auction is still taking place as scheduled, since lenders sometimes change the date of the auction at the last minute. This is also a good time to verify the opening bid for the property, so you’ll know what to expect and be better prepared to plan your bidding strategy.

The rules (and art) of bidding
The lender typically sets the opening bid by calculating the full amount owed on the loan. This includes the principal, interest, any late charges, penalties, and foreclosure fees (as allowed by state law). At the auction, proceedings are opened when the lender or official running the auction announces the sale and the opening bid amount, with bidders free to call out bid prices until a high bid is reached. At your first auction, knowing what not to do is almost as important as knowing what to do. The day of the auction, it’s important to feel confident in your ability to bid, so that you won’t be distracted by comments or “advice” given by other bidders. Remember, everyone attending the auction is likely there to bid against you, so it goes without saying that you’ll be hard-pressed to find a mentor to guide you through the process and look out for your best interest.

“Since you’re paying cash and there are a lot of unknowns, certainly you should keep your maximum bid in a safe range, like 60 to 70 percent of market value,” suggests Marrs, adding that one might be willing to go higher than 60 to 70 percent in more competitive markets.

Handing over the money
Once congratulations are bestowed on the highest bidder, it’s quickly time to pay up. The majority of auctions require the successful bidder to pay for the property in full, in cash and on the spot. So it’s important to have your finances in order well before the date of the sale and come to the auction with cash or certified funds such as a cashier’s check, money order or a bank certified check made payable in the buyer’s name. In some cases, the successful bidder is given 24 hours or even up to 30 days to pay the full amount cash. Check state foreclosure laws to determine the auction payment options for each state.

A few things you should know before moving in your furniture
Once you’ve placed the high bid and paid in full, the property is yours for good, right?

Not exactly.

Like anything else, there’s a bit of fine print to be aware of when buying at a foreclosure auction. In some states, the original owner of the foreclosed property has what’s called a right of redemption. For a set amount of time (often up to 12 months), the original owner has the right to pay the full amount owed for the property, plus any applicable fees and interest, and buy it back it, barring any additional foreclosure activity. It’s a good idea to check the foreclosure laws in your state to understand what right of redemption exists. Though these procedures are rarely taken advantage of, it’s important to know what they are.

Foreclosure auctions certainly present great opportunities to grab bargain deals in the real estate market. But they’re not for the faint of heart, nor the unprepared. Still, doing your research on the property for sale and on how the process works can demystify things, allowing you participate with confidence.

Good luck and happy bidding!

Property Auctions: Be Ready Before the Bidding Begins

RE.com Tips & Tools — Sun, 02 Aug 2009 15:30:00 GMT

By Rick Sharga, RealtyTrac Vice President of Marketing

Buying a property at a public foreclosure auction is not for the faint at heart. It usually requires patience, persistence and a fair amount of cash, since most state foreclosure laws stipulate that the winning bidder pay all or part of the winning bid on the spot.

But for those willing to do the work and able to front the cash, auction properties can yield bargains of 20-40 percent below the market value, and sometimes even more. Like any high-yielding investment, foreclosure auctions come with a certain amount of risk. Managing that risk successfully depends on first doing thorough research on the properties you plan to bid on—perhaps the single-most important step in a successful and profitable auction purchase.

“You’ve got to know the property inside and out and you’ve got to know that the party who is auctioning the property is, in fact, in the first lien position,” said T.J. Marrs, a real estate investment trainer and author based in Vancouver, Wash. Since many properties may have multiple liens (first and second mortgages or tax liens, for example), this is a critical piece of information to have before the auction begins. Marrs added that if the party auctioning the property is not in the first lien position, the winning bidder may have to pay off other outstanding loans against the property.

It helps that researching properties has become much easier with advances in information technology. In the past, home buyers and real estate investors sifted through piles of documents at the local courthouse to properly research properties. But thanks to online services like RealtyTrac, you can accomplish extensive property research from home or anywhere else you happen to be, as long as you have an Internet connection. That doesn’t mean you will feel comfortable interpreting all the data available from this research. First-time auction buyers or investors may be wise to rely on a local real estate agent or real estate attorney to ensure they’re making good decisions about which properties to bid on and how much to bid. Contact an Agent using RealtyTrac’s nationwide network of prescreened real estate professionals.

Whether working with a real estate professional or not, you can follow this property research checklist to make sure you’re fully prepared when you attend an auction.

Research state laws and observe a local auction
Each state governs how the foreclosure process – and specifically the auction procedure – works in that state. The process can vary widely from state to state, so aspiring buyers or investors should study the foreclosure process in their state. Important factors to consider are how quickly a property can go to auction after the owner defaults, how much cash is required at the auction and if the owner has any redemption period after the auction.

In some states a property can be sold at auction less than a month after the owner defaults, while in other states the foreclosure process can stretch out more than a year, not including any redemption period. The length of the foreclosure timeline certainly influences how quickly you need to research a property and secure the necessary cash to bid at the auction. If there’s a redemption period, the former owner can typically buy back the property by paying the full amount of the winning bid (plus any applicable fees and penalties) during the redemption period. If you’re the winning bidder, you should wait until the end of the redemption period before sinking any additional capital into a property purchased at the auction. RealtyTrac’s state foreclosure summaries provide specifics about how the foreclosure process works in each state.

First-time auction buyers should attend a local foreclosure auction to observe how state foreclosure laws play out in the real world. RealtyTrac provides a daily updated list of properties nationwide that are scheduled for public foreclosure auction. Auctions are often postponed or canceled, so it’s a good idea to call the trustee or attorney listed on the day of the auction to confirm.

Secure financing
Before bidding at an auction, you’ll need to evaluate the cash you have available to spend on an auction purchase. In addition to considering liquid assets such as bank accounts, stocks and bonds, you can apply for a home equity loan to cash out the equity in your home or other real estate assets. Once you calculate the cash you have available, you can determine how much of that cash you feel comfortable using to purchase an auction property. Of that amount, you will need to set aside some for estimated repairs and some to pay off outstanding liens that survive the auction purchase (although if you purchase the auction property below market value, you may be able to take out a home equity loan on the newly purchased property to fund repairs.) The remainder of the cash can be used for bidding at the auction.

Some states require as little as 5 percent of the purchase price in cash at the auction. Others require the entire purchase price in cash. Either way, you will need to present the necessary cash at the time and place of the auction, usually in the form of a cashier’s check. That means you should be ready to withdraw your cash quickly when an auction opportunity arises. If the winning bid is below the amount of the cashier’s check presented at the auction, the trustee at the auction should reimburse the winning bidder for the difference, although reimbursement may take several days or longer. Many bidders bring several cashier’s checks in incremental amounts so they avoid having to wait for a substantial reimbursement.

Analyze market value
Once you’re comfortable with how the foreclosure process works in your state and your spending limit, you can dive in and start pursuing specific auction properties. For any property scheduled for auction, the first step is to compare the property’s estimated market value to the opening bid. The opening bid is the total amount owed to the foreclosing lender and is the minimum amount the property will sell for at auction. This amount is included on the public auction notice and on each auction property listed on RealtyTrac. In addition, RealtyTrac arms subscribers with each property’s estimated market value and a list of up to 15 recent comparable sales. If the opening bid is higher than the estimated market value, that particular property does not present a bargain-buying opportunity. But because of the hot real estate market in most areas, the opening bid is usually far below the estimated market value, making for the possibility of a profitable purchase. A quick market value analysis is just the beginning, however. You need to dig deeper to find a property’s true investment potential.

Check lien & loan history
Before bidding a dime at the auction, it’s important that you carefully research a property’s title for any liens and loans that won’t be cleared out by the auction sale. All liens and loans affecting a property’s title are available at the local recorder’s office or online through RealtyTrac. Unlike typical real estate purchases, auction sales don’t always transfer ownership of the property with a clear title; therefore, it’s possible for a buyer to purchase a property at an auction and still have to fork over additional funds to clear out other outstanding debts secured by the property. You might be willing to do this, but you need to know about any outstanding debts before the auction so you can set your maximum bid appropriately.

To determine which liens and loans will be cleared out by an auction sale, you should look at the priority of the liens and loans taken out by the current owner. Priority is typically determined by the date when the lien or loan was recorded. The first recorded takes highest priority and the most recently recorded takes the lowest priority. The defaulted loan that triggered the auction sale typically clears out any “junior liens” that have a lower priority. There are a few exceptions such as property tax liens, which take priority over all other liens and are not cleared out by an auction sale. Any “senior liens” that have a higher priority than the defaulted loan will usually continue to encumber the property after the auction.

Property title research is probably the most complex and technical part of the auction-buying process, and it’s impossible to overemphasize its importance to a profitable auction purchase. First-time auction bidders should seriously consider enlisting the help of a local real estate agent, attorney or Title Company for this part of the research.

Estimate needed repairs
Estimated repairs should be factored into any property purchase, but there’s an added twist with auction properties: in most states, auction bidders don’t have any opportunity to view the inside of the property before they bid, let alone hire a professional inspector inspect the property. You may be able to approach the current occupants and ask permission to view the inside, but that permission is not guaranteed.

While this makes it difficult to pinpoint exact repair costs, you can obtain a ballpark estimate just by viewing the property from the outside. You will be able to infer a lot about the property’s overall condition by observing the condition outside. Serious buyers will park their cars and walk by the property and around the neighborhood, also looking for neighbors as potential sources of information. You can also check natural hazard reports to see if the house is located in a zone that makes it more prone to flood, fire or earthquake damage. Still, the exact cost of repairs is unknown, and you should leave some extra margin for profit in your maximum bid in case repair costs escalate above your estimate.

Calculate your maximum bid
The maximum bid is simply the amount a buyer is willing or able to pay at a public auction. It’s important that you set a maximum bid before the auction to make sure you don’t get caught up in the emotion of a bidding war and end up overbidding. Marrs, the real estate investment trainer and author, recommends setting a maximum bid of 60-70 percent of the property’s market value as a general rule of thumb. This amount may vary based on the local real estate market conditions. From this baseline bid amount, you should subtract estimated repair costs and any outstanding liens and loans that aren’t cleared out by the foreclosure sale.

At the auction, stick to your maximum bid and don’t be influenced by other bidders. Sometimes the foreclosing lender or junior lien holders will bid at the auction to make sure all of their debts and costs are covered by the winning bid. This can sometimes inflate the winning bid close to market value, eliminating any chance at a great bargain. Of course, the bidding will go up incrementally, so you shouldn’t immediately jump to your maximum bid. Continue to go up incrementally until you reach your maximum bid or are declared the winning bidder.

You should consider foreclosure auctions, whether you’re looking for a great bargain on a home for yourself or entering the real estate investment arena. Auctions aren’t for all buyers, but with the proper resources and the right research they can be a prime opportunity to purchase property below market value.

Secrets to Closing Last-Minute Pre-Foreclosure Deals

RE.com Tips & Tools — Sat, 01 Aug 2009 12:00:00 GMT

By James J. Saccacio, Chief Executive Officer

If you’re interested in investing in pre-foreclosure property, you should know that owners in default may not agree to sell until the last minute — sometimes only a few days before the public foreclosure auction. You’ll need to act quickly and may even need to take steps to postpone the auction if you want to realize pre-foreclosure bargains.

"I like to have the deal worked out with the homeowner at least 10 days prior to the auction. This allows enough time to settle on the pre-foreclosure without worrying if the foreclosing bank will postpone the auction and allow me enough time to settle," said Lance Young, a real estate investor and author of several real estate investing eBooks.

Depending on state foreclosure laws, the pre-foreclosure period can last less than one month or more than one year. Owners in default often are more motivated to sell the closer it gets to the date of the public auction. So even if you’ve contacted owners early in the pre-foreclosure period, you shouldn’t be surprised if they wait until the last minute to sell the property. Once the owners indicate they wish to sell, you’ll need to spring into action immediately to make sure that you are able to negotiate a price that’s acceptable to both parties, sign a sales contract and close the deal before the date of the public auction. Young recommends the following steps to get all this accomplished in as few as 10 days.

1. Pinpoint the amount owed
You should already have an estimate of the amount owed on the property based on your research of the notice of default or notice of sale and any liens and loans on the property. Once you’re ready to put an offer price in writing, you need to determine the exact amount needed to satisfy the foreclosing bank and any other lien holders — including missed payments, late fees and foreclosure attorney fees and the loan balance — by having the homeowner sign a disclosure authorization.

"This is as simple as having the homeowner write down his or her name, address and loan number on a short note that states the bank has permission to release this information to you," Young said, noting a disclosure authorization should be obtained for first and second loans. For other liens, such as a mechanics lien for work done on the property, you can usually just contact the lien holders and ask for the payoff amount.

"Be aware that many junior lien holders will sell their liens at a huge discount prior to the auction – especially when you inform them that the house is in foreclosure and their junior lien stands a good chance of getting wiped out at the auction," he said.

2. Negotiate and sign a sales contract
When you have the exact numbers to work with, you can negotiate the final purchase price and other terms of the sale with the owner. If your homework shows the property has a solid amount of equity, you’ll be able to make a pre-foreclosure offer that benefits you, the owner and the foreclosing lender. You purchase the property below market value, the owner walks away without a foreclosure marring his or her credit history and some cash for a fresh start, and the lender recovers the amount owed without the expense of continuing the foreclosure process.

Put your purchase agreement in writing in a standard sales contract, which you can obtain from a local real estate agent or escrow company. Young recommends including a clause in the contract that releases you of any legal or personal obligation if the sale doesn’t close before the public auction.

"If you cannot settle on the house prior to the auction, you lose the deal. If you do not clearly write into the contract that it is null and void if you cannot settle in time, you might get sued by the former owner," he said.

3. Open escrow and close the deal
Take your signed purchase agreement to a local escrow company and open a case for the transaction. The escrow company acts as a third party, making sure all the terms of the transaction are properly enforced.

"In addition to disbursing all of the funds properly and transferring the title, escrow companies ensure that all documents are correctly filled out and signed." Young said. "You should also obtain title insurance through the escrow company. Obtaining title insurance from the escrow company is very important because it insures you against any defects on the title."

If you’ve got your financing in place and the escrow company doesn’t have a lot of other cases in front of you, escrow could close in as little as one week, according to Young. It’s best to have your financing secured before you even contact owners in default so that you’re prepared to act quickly to make a purchase.

4. Request an auction postponement if necessary
Sometimes you won’t have enough time to close the deal before the auction, even if the owner has agreed to sell. In this case, you can ask the lender to postpone the auction date so that you have time to complete the purchase transaction.

"The best way to get the bank to postpone the foreclosure auction is to present the lender with a signed sales contract, along with a loan qualification letter from your bank, Young said. "The sales price must cover all of the money owed to the foreclosing lender, including the principal balance and the reinstatement amount. Bear in mind that the lender is not required by law to stop the foreclosure, although most of them will if you have both a loan qualification letter and a signed sales contract. If the homeowner has waited until the day before the auction to sell, you still have a good chance at getting the auction postponed by showing the lender your loan qualification letter and a signed sales contract.

Understanding and Navigating Your Way Through the Foreclosures Process

RE.com Tips & Tools — Wed, 29 Jul 2009 12:23:00 GMT

By Rick Sharga, RealtyTrac Vice President of Marketing

Foreclosure properties can be a terrific investment, or give home buyers a much more affordable option than traditional properties in this time of escalating prices. But, before you jump in assuming this is "real-estate for dummies" or the next get-rich-quick scheme, think again! You really need to know your stuff when it comes to navigating your way through the process and making sure you’re getting the most bang for your buck.

"For people willing to do some homework, the foreclosure market offers some of the best opportunities in real estate today," explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace.

Web-based services like RealtyTrac can help investors and homebuyers tap into this previously hidden market by providing access to foreclosure and pre-foreclosure information typically available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal.

When offering advice to buyers interested in taking advantage of the foreclosures market, Saccacio stresses the importance of educating oneself about the types of properties and the processes involved. Even seasoned real estate investors have something to learn when it comes to approaching this market. It’s important to go in with the appropriate knowledge.

Types of Properties Available at Various Stages of the Process
Serious buyers must first understand the difference between the varying types of foreclosure properties. It’s important to review the basic types of properties, each representing a different stage in the foreclosure process.

Pre-foreclosure Properties
A property enters pre-foreclosure after a default notice is filed by the foreclosing lender against the borrower who owns the property. The different notices that are filed during pre-foreclosure include Notice of Default (NOD), Lis Pendens (LIS), Notice of Trustee Sale (NTS) and Notice of Foreclosure Sale (NFS). For most consumers, buying a pre-foreclosure property from a private homeowner is the most favorable of options. This is a best-case scenario because the seller is able to get out from under a mortgage without destroying his or her credit rating, the lender is saved the time and expense of foreclosing on the property, and the buyer gets a below-market price on a home. In addition, buying at this stage of the process allows you, the buyer, a chance to fully evaluate the property before making an offer.

The disadvantages associated with purchasing a property during the pre-foreclosure stage are few, but worth mentioning. As with any major purchase, negotiations between the buyer and seller can be difficult, especially since the seller would typically prefer not to have to sell the property in the first place. Secondly, transactions are time-sensitive, since there is pressure to complete a sale before the property goes to auction.

Auction Sales
Foreclosure auction sales are typically the domain of the professional investor. These properties are formally in default, and sold to the highest bidder at an auction. Buyers are required to be physically present at the auction and must be prepared to pay 100 percent of the sale price in cash on the spot.

Though foreclosure auctions can offer significant savings as well as immediate property ownership, they are not for the faint of heart or the uninformed! Unless the buyer is already familiar with a particular property, there is usually little time to examine it. And, the buyer will be competing against professional investors—and sometimes even the lender—at the auction.

Real-Estate-Owned Properties
Once the lender officially reclaims a home, it is classified as Real Estate Owned by the lender (REO). While REO properties typically offer more time for evaluation and a more standard bank-managed transaction, their prices are usually very close to full retail market value. Therefore, they offer buyers the lowest potential savings.

It’s definitely possible to find great deals in the foreclosures market. You just need to know where to look and be able to differentiate exactly what you’re looking at. With an understanding of the pros and cons of buying at each stage of the process, you’ll be well on your way to a successful purchase you can be proud of.

Five Tips for Buying a Foreclosure Property Below Market Value

RE.com Tips & Tools — Mon, 27 Jul 2009 15:16:00 GMT

By Jim Saccacio, RealtyTrac Chief Executive Officer

If you feel like the escalating costs of real estate have priced you out of the market, think again. It may be time to investigate the vast opportunities available in the foreclosures market.

For people willing to do a bit of homework, the foreclosure market offers some of the best opportunities available in real estate today. Experts point toward significant growth in available foreclosure properties, so there’s never been a better time to line up your resources and educate yourself about this previously hidden market. It’s not unusual to save from 10 to 30 percent of the market value on a foreclosure property, and certain properties offer savings of 50 percent or more! There really are bargains out there. You just have to know where to look.

Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal. RealtyTrac, which provides all the foreclosure data for both MSN House and Home and Yahoo! Real Estate, has already compiled a list of over 550,000 foreclosure properties across the country.

The keys to a successful foreclosure property purchase are diligence and patience, along with taking an educated approach to investing in this market. RealtyTrac CEO Jim Saccacio offers five tips to help you close a deal on a foreclosure property:

1. Learn about the different types of properties and the foreclosure process.
Not all foreclosures are the same! You need to educate yourself on the difference between the three basic types of properties, including notice-of-default (NOD), notice of trustee sale (NTS), and real-estate-owned REO, as well as the positive and negative aspects of buying at each stage of the foreclosure cycle.

As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution.

2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate.

3. Engage a real estate agent as a “buyer’s representative”
There’s a distinct difference between a buyer’s and a seller’s representative. Buyer’s representatives have the home buyer’s interests at heart, and are charged with finding the right property and negotiating the best price for their clients. Picking the right real estate agent will make your life much easier. Ideally, select an agent who specializes in the foreclosures market and has specific experience in REO properties.

4. Do your homework
Purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties. But, with that risk comes reward in the form of much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. As with any purchase, timing is everything! But, it makes sense to give any property under consideration a thorough examination, including determining its condition and value, finding out the amount in default and the remaining loan balance, and running a legal investing report to make sure the property is free of any financial liabilities. Of course, it never hurts to foster a positive relationship with the seller!

5. Make a realistic offer
If you want to be taken seriously as a buyer, you must be realistic when preparing an offer. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. Additionally, homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.

Why Buy a Home?

RE.com Tips & Tools — Tue, 21 Aug 2007 18:30:00 GMT

Having trouble deciding whether to buy a home? While home ownership isn't right for everyone, there are a few advantages that are well worth considering.

Deciding to buy a home is a big step in anyone’s life. For first-time home buyers in particular, the financial commitment of a mortgage can be daunting. Why pay all that money up front when you can simply go on renting? The answer, of course, depends on many different factors. But there are several good reasons that everyone should consider.

1. The chance to build equity.
Aside from having a roof over your head, the ability to build equity is one of the most valuable aspects of home ownership. Each monthly mortgage payment you make helps you to build equity and brings you closer to owning your home outright. Home improvements that increase the value of your property may also add to your equity. And, if property values in your area rise, your equity will, too.

2. Possible appreciation.
Most large purchases, like cars, boats or electronics, go down in value as they age. Conversely, a home usually increases in value over the years, especially if it’s been well maintained. And if your home’s value has increased substantially by the time you’re ready to move, you may be able to profit from its higher resale price.

3. Preferential credit options.
Once you build up equity in your home, you can benefit from a new avenue of borrowing through home equity loans and lines of credit, and cash-out refinancing. Home equity loans -- loans that are leveraged against the value of your house -- are usually offered at a lower interest rate than conventional loans because, with the house as collateral, they represent a lower risk to the lender.

If you manage these credit sources wisely, they can become a valuable source of income for major purchases such as a new car, vacation property, home renovations or emergency funds to use in the event of such things as a job loss or unforeseen medical expenses.

However, because a home equity loan is secured with your house, it’s important to never borrow more than you can comfortably afford to pay back. Otherwise, if you miss your payments, the lender could end up taking possession of your home.

4. Beneficial tax breaks
Home ownership does require you to pay some extra fees, such as property taxes and interest on your mortgage balance. But fortunately, both of these expenses are usually tax deductible.

Borrowing against your home’s equity may provide a tax break, too. Home equity loans of up to $100,000 are usually tax deductible. In addition, if you’ve used your house as a primary residence for two or more years, you can exclude up to $250,000 (or $500,000 if you and your spouse file jointly) in capital gains when you sell the property. (Check with your financial advisor for advice on your personal tax situation.)

5. Personal control
As a homeowner you can often exercise greater control over your housing costs than renters. For example, you may choose to lower your monthly utility bills by reducing your energy consumption. This may not be possible as a renter if utility charges are bound up in your rental payment. Also, when you own your own home, you have more freedom to renovate as you choose without worrying about restrictions set out in a tenancy agreement. Plus, any upgrades you make may eventually pay off by increasing the resale value of your home.

6. Pride of Ownership
Finally, home ownership has plenty of non-financial benefits, too. When you own a home, it’s yours; you can do what you want with it in terms of decorating, gardening or renovating.

Remember, you not only own the house, but the land it sits on. There are few things as empowering as knowing that there’s a piece of the world out there that belongs to you; a place you can truly call home.

Building vs. Buying a Home

RE.com Tips & Tools — Fri, 03 Aug 2007 17:01:00 GMT

Building a new construction home or buying a resale home – which is right for you?

If you’re on the market for a home, you may be asking yourself whether it makes more sense to build a new home or buy a resale home. If you are looking to buy a home, it’s a big decision. The answer depends on what is important to you.

Advantages of an existing neighborhood
Established neighborhoods with lived-in homes have much to offer. If the neighborhood has been around long enough, trees may canopy the streets and the landscaping may be lush and mature. It is hard to beat the charm of an established neighborhood that is already lined with well-loved family homes. It’s a place you can easily imagine walking the dog or strolling with the family. Another advantage of a resale home is that you can move in relatively quickly. With a new construction home, you often have to wait for construction to be completed. It could be six months or more, depending on delays from the weather or supply shortages. A resale home is ready at closing, often just 30 to 45 days after making an offer. That beats having to stay in a cramped apartment waiting for your home to be built. There is also convenience involved with buying an existing home. You won’t have to put up with construction traffic through your neighborhood as other homes are completed and you already know what surrounds your home. Also, a resale home can usually be purchased at a better value per square footage than new construction. You often get more house for the money with a resale home.

Advantages of a new construction home
Like the idea of being the first to live in a house, picking out its features for yourself? Then new construction may appeal to you. Although new neighborhoods may lack certain charms of an older neighborhood, in many ways new neighborhoods may be more desirable. The location of a new neighborhood is one of its best features. New neighborhoods tend to go up on the outskirts of town, where the new growth occurs in a community. That often means new schools for all of these new residents. It can also mean new shopping centers to accommodate that growth, too. You’ll often find big box stores convenient to new construction neighborhoods. New neighborhoods also tend to have great amenities. Today, everyone wants workout facilities, playgrounds, open spaces, swimming pools, etc. in a neighborhood. A resale home may not be able to offer much of that, but new construction homes often feature these amenities. Many new neighborhoods often have social functions centered around its pool, open spaces, etc.

Love a nice lawn but hate spending your Saturdays taking care of it? Well, a trend in new construction communities is to have lawn maintenance provided with your homeowner’s dues. No more getting up early on Saturday morning to beat the heat to mow. New construction homes also offer a chance to be friendly to the environment. New construction must be built to abide by the latest regulations, but that also means that they are usually more energy efficient than a resale home. That could equal savings to you each month on your utility bills. Weigh the pros and cons of buying a resale home vs. building a new construction home. Know your tastes and what is important to you when making this decision. Then, go out and buy the home that is right for you.

Should you rent or buy a home?

RE.com Tips & Tools — Wed, 17 Jan 2007 20:21:00 GMT

Consider the pros and cons of renting versus buying a home to see what makes the most sense for you.

To buy or not to buy -- that is the question. In fact, it may be one of the biggest questions you ever ask yourself. Depending on your answer, the payoffs and responsibilities could be huge. So don’t rush into anything.

Buying: The pros

• Tax perks. Mortgage interest is tax-deductible up to a limit of $1 million. Plus, if you sell your principal residence for more than you paid, you can exclude from taxes up to $250,000 of the profit, or $500,000 if you’re a couple who files jointly.

• Build equity. Every time you pay your mortgage, you gain more equity in your home. Plus, if property values increase, so will your home equity -- the difference between what the property is worth and how much you still owe on your mortgage.

• Security. Home ownership gives you a sense of permanence. You have the security of knowing you can live in your home for as long as you want.

• No strings. Buying a home gives you the ability to live on your own terms. There’s no lease or landlord. Nor are there any restrictions on pets, smoking, painting or renovating. If you buy a condo, you will have to comply with the regulations of the condominium corporation and, most likely, the homeowner’s association.

• Sense of pride. Owning your own home is a big accomplishment. You can take pride in your achievement.

Buying: The cons

• Long-term commitment. It’s not usually advisable to buy a home if you plan to sell it within a couple of years. You may not be able to recoup all of the buying costs.

• Added expense. Mortgage payments are usually higher than rent. And there are other expenses that accompany home ownership: property taxes, insurance, utilities and home repairs.

• More responsibility. Being King or Queen of your castle brings added responsibilities. You won’t be able to call the landlord if you have problems with a leaky dishwasher, broken furnace or other domestic malfunctions that need attention.

Renting: The Pros

• Costs less. Today’s low mortgage rates have made it more affordable to buy a home than it once was but, at the end of the day, it’s still usually cheaper to rent.

• Less responsibility. If the air conditioning breaks down, you can just call the landlord. When you rent, it’s not your problem. There’s no skin off your back if property taxes and mortgage rates increase or the real estate market takes a nosedive. You just pay your rent (and possibly utilities depending on your lease) and get on with your day.

• More freedom. Renting requires minimal commitment. Besides paying first and last month’s rent, you’ve most likely only got a yearly lease to contend with. So, renting may be ideal if you don’t have a steady job, if you’re new to the city or if you’re contemplating moving abroad in the foreseeable future.

Renting: The Cons

• No equity. You may be spending less than you would if you owned, but you’ll never see a cent of that money again. When you rent, you’re helping someone else pay down their mortgage. You’re not building up your own personal net worth.

• More restrictions. As a tenant, you have to live by your landlord’s rules. That could mean no pets, no guests or no painting the walls your favorite color.

• No guarantees. You may find the rental unit of your dreams. But there’s no guarantee you can live there as long as you want. It’s not uncommon for tenants to be forced to leave if the owners sell the property or decide to move into the unit themselves.

Condominium buying basics

RE.com Tips & Tools — Tue, 16 Jan 2007 21:08:00 GMT

Understanding the differences of buying a condominium versus a single family home can help you through the process.

Buying a condominium is very much like buying a house. There are a few minor differences that you should keep in mind, though.

When buying a condominium, it is important to understand how a condo differs from other types of homes. If you choose to live in a condominium, you can have neighbors above, below, and beside you. It is similar to living in an apartment, except that instead you own your home. Also, you will have no yard to maintain. Condos can be more affordable, which makes buying a condominium a great way to become a first-time homeowner.

Because a condo is different than a single-family house, there are certain things that you should be aware of when buying a condominium. For example, because you share walls with your neighbors, you need to check on soundproofing. Make sure the condo you decide to buy is quiet and that you cannot hear your neighbors walking above you, vacuuming below you, or watching television next door. Also, when buying a condominium, look to see how well the building is maintained. You also need to consider the parking availability. Is there covered parking or parking close to your unit?

Something else to keep in mind when buying a condominium is the homeowner’s association. You can ask to see the minutes of the last meeting to see what issues were important to others in the building. Find out how much homeowner’s dues are and what you get for paying that fee.

Condominiums also can come with amenities. Be sure that the condo that you are considering has the amenities that you want. Realize that you pay for the amenities through the homeowners’ dues. If the condos have a pool and you do not want a pool, perhaps you should look at buying another condominium since you may have higher dues with a pool. Through a little searching, you can find the condo with amenities that most appeal to you.

Being prepared helps in any home search. By understanding exactly what you are getting, you can have a great experience buying a condominium.

Tips to buying a townhouse

RE.com Tips & Tools — Tue, 16 Jan 2007 18:26:00 GMT

Understanding what is involved in the purchase of a townhouse can help make the process easier.

For those who feel a condominium might be too small but a single-family house too big, buying a townhouse can be a perfect solution. Here are a few things to keep in mind that will help you with your purchase.

A townhouse is part of a building with attached neighbors, but the neighbors are only beside the unit, not above or below. Also, a townhouse often includes a small deck or backyard space.

Check out the homeowners’ association of any townhouse that you are interested in purchasing. Ask to see the previous month’s minutes so that you can see what issues were brought up. This can give you insight in to what issues are considered important in the townhouse community. When buying a townhouse, also remember to find out how much the homeowner’s dues are and what comes with paying that fee.

It is important to keep in mind the amenities that are important to you when buying a townhouse. Find a townhouse with exactly the amenities that you want. If you want a swimming pool, find one that has that. If you want a workout facility, look for a townhouse that has one. Realize that you pay for these amenities through your homeowner’s dues.

There are many advantages in buying a townhouse. Townhouses may have more security due to the proximity of your neighbors, but this also means less privacy. There should be fewer repairs and maintenance for you to be responsible for, although you will pay for any repairs through your homeowner’s dues. By knowing what you want, you can find buying a townhouse to be a great experience.

Owning a home is easier than you think

RE.com Tips & Tools — Fri, 12 Jan 2007 20:43:00 GMT

Don’t let common misconceptions prevent you from becoming a home owner.

Buying your first home can be intimidating. There’s a lot of misinformation floating around that can lead you to believe that owning a property is out of your reach. But it’s easier than you might think. Here’s what you need to know:

Buying versus renting
Monthly mortgage fees can be lower than the cost of paying rent. Plus, unlike rental payments that almost always rise, you can request a fixed-rate mortgage to lock in your monthly payments for the life of the loan. You can also write off the interest you pay on your mortgage. (It’s tax deductible up to a limit of $1 million, though always consult a tax advisor about your situation.) And, to top it off, you’ll be increasing your net worth by building equity in your home.

Making a down payment
Lenders no longer expect all buyers to have a down payment of 20 percent in order to qualify for a mortgage. According to the National Association of Realtors, today most first-time home buyers put 10% or less down on their homes. There are also government-backed down-payment assistance programs available to help you if you’re having trouble coming up with sufficient funds.

Qualifying for a mortgage
Don’t assume you won’t be able to qualify for a mortgage just because you have a low credit score. If your score puts you in the category of a “risky borrower,” you may be required to pay for mortgage insurance. You may also incur a higher interest rate. But once you’ve paid your mortgage down for a year or two, and you improve your credit score, you should be able to cancel the insurance and renegotiate the loan at a better rate.

Meeting monthly payments
If you can make your rent, you can meet your mortgage every month. Just be realistic. Make sure you have enough money left over to pay your other bills. Most lenders recommend that your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. When you first take possession, you’ll also need to factor closing costs (often two to five percent of the home’s purchase price), plus moving, redecorating and maintenance into your budget and allow for increases in ongoing expenses such as utilities and taxes.

Subsidizing your mortgage
Still not sure your money will stretch as far as you need? Don’t throw in the towel just yet. Consider getting a roommate to help meet the mortgage payments or renting out the basement. If you’re self-employed, moving your office into your home may enable you to write off a portion of the expenses (check with a financial advisor).

Know what you’re getting
Not all mortgages are created equal. Some first-time home buyers, attracted by the low monthly payments, opt for mortgages that don’t allow them to build equity, or, even worse, put them in a situation where they are losing money.

Negotiating the Best Price

RE.com Tips & Tools — Thu, 11 Jan 2007 21:57:00 GMT

It takes a keen understanding of the home-buying process to be good at negotiating. Be sure you have it down before you make any offers on homes

Be sure you have the process down before you make any offers on homes. Here are tools and information the best negotiators use:

CMAs — Comparable market analyses

Once you’ve found a home you want to buy, the first step in negotiation is to assess the fair value. CMAs show what similar properties in the area have sold for. Your real estate agent will have access to CMAs and can share them with you.

Generally, CMAs list houses in a particular location that are currently on the market, have sales pending, have expired from the market or have sold. It is the "sold" properties you need to look at because the list price and the offer aren’t necessarily the best indicators of what the house will sell for. There can be a big discrepancy between the two figures.

The CMA often gives you general information about the houses being compared: number of bedrooms and baths, square footage, the listing price and the sold price. Make sure you focus on houses similar to the one you’ve selected — both in description and location. The more recent the data, the better.

Condition

Once you have the CMA, drive by all of the properties listed in the sold column. Condition has a lot to do with the ultimate selling price of a house. Does the home in which you’re interested shine above or fall below those sold? Make a realistic comparison of condition, then adjust your thinking up or down according to what you see.

Extra amenities

Does the house you’ve chosen have more or fewer amenities than comparable homes? Although amenities won’t affect the value as much as location or condition, they can be a factor. Be wary, though. An outdoor hot tub may have been a major motivating factor in your choice of a house, but it won’t add much to the value of the property when you resell.

Motivation

A good negotiator gathers as much information as possible on the house and the sellers. The owner’s reason for selling is at the top of the list. Does she have to sell? Want to sell? Just throwing it on the market at a high price to see if it’ll move? If your agent representing you in the transaction is a buyer’s agent, they can try to secure this information for you. If you’re working with an agent representing the seller, they typically can’t disclose this information without the seller’s consent.

Preparation

Great negotiators always prepare themselves. The most important factor is your frame of mind. Never let emotions override common sense during negotiations. Set a realistic limit and stick to it. If the price isn’t to your liking or is outside your budget, walk away.

In addition to your emotional frame of mind, your finances should be in order. An offer carries more weight if there are no dangling financial problems and if you’re prequalified for a mortgage.

Realism

Make a realistic offer. Nothing turns a seller off more than a low-ball offer on a house that is fairly priced. Often, negotiations will stop, rarely to be revived again.

An example: Mr. and Mrs. Buyer find the perfect house after looking for months. The house is listed at $155,000.

Mr. and Mrs. Buyer have a CMA that shows average selling prices in the neighborhood to be $148,000 to $153,000. Ignoring the CMA, they offer $120,000.

Mr. and Mrs. Seller, annoyed at the low offer, counteroffer at full selling price, $155,000. The Buyers, still wanting to steal this house, make a second offer of $125,000. The Sellers, very frustrated, don’t move from their $155,000 price.

Suddenly, there is word that another offer is forthcoming from the Smiths. The Buyers up their offer to $154,000 and the Sellers accept.

A first offer in the $150,000 range (remember, the CMA showed $148,000 to $153,000) may well have been accepted by the Sellers. If this is the case, the Buyers have paid $4,000 more than necessary.

Tips on Buying and Selling a Home at the Same Time

RE.com Tips & Tools — Thu, 11 Jan 2007 16:56:00 GMT

With careful planning, buying and selling a home at the same time can be a lot easier than you might think

Here are some tips to get you started.

Preparation

Hire a team of professionals who are experts in buying and selling homes. Ask family and friends which REALTOR®, lawyer, lender, appraiser, home inspector and mover they’d recommend. Meet with them and discuss your objectives, requirements and expectations right from the start.
Communicate with your team of professionals efficiently and regularly. For instance, more and more buyers are asking their REALTOR® to e-mail new home listings to save time and ensure they don’t lose out on a property that sells fast.
Ask your REALTOR® to keep you advised of important issues as they occur so you can resolve them together quickly.
Help organize all your buying and selling information. Dedicate a notebook to documenting the many dates and details of phone and face-to-face discussions, as well as important transactions.

Selling

Put your home up for sale far in advance of purchasing a new one. You may want to consider selling first, especially in a buyer’s market. You’ll know exactly how much money you have for your new home. Plus, you’ll decrease the risk of temporarily owning two homes at the same time.
Ensure you have ample time to find a new home (in the event that you sell first) by negotiating a long close or convenient rent-back option, where you can stay in the house as a rental tenant until you take possession of your new home.
Be motivated to sell; list at a competitive price. If you suspect your home has problems that may hinder its sale, work with a home inspector to coordinate repairs or ensure your asking price reflects the home’s condition.
Look at the big picture. You may want to consider a slightly lower offer if it is unconditional, or an offer that gives you more flexibility with respect to the closing date, as is often the case with first-time home buyers who don’t have to sell their existing house first.
Speed up the selling process by giving preferential treatment to offers without financing conditions, or insist that buyers be pre-approved within five to 10 days of accepting their offer.
Get the buyer of your old house and the seller of your new house to commit in writing to a specific window of dates and negotiate financial penalties to encourage both parties to stick to those dates.

Buying

Before you list your home, do a little digging and see what’s up for sale in your price range. Little within your reach? You may want to hold off on selling until you buy. When you do, negotiate a long close to give you the necessary time to sell.
Don’t waste your time looking at properties you can’t afford. Do the math and determine your budget. While you’re at it, select a lender and get pre-approved for a mortgage.
Once you’ve found a property that seems perfect, have it professionally inspected and ensure you can get insurance before you make an offer.
Give yourself enough time to review all the paperwork. From the get-go, tell your REALTOR® or lawyer you’ll need ample time to see and sign the closing documents.

Moving

Only move what you need and love. Donate old and seldom-used clothes, housewares and furniture to charity. Regardless of the season, do some spring cleaning so you’re not packing what should really be tossed out.
Organize your move by utilizing to-do lists and home-inventory lists (available from your REALTOR,® mover or the Internet). Make a master list of the items you pack and code all the boxes to ensure nothing gets lost and the movers can carry everything to the appropriate rooms in your new home.
Give your utility providers, postal service, associations and other contacts plenty of notice of your pending move and arrange new start dates for services at your new home.
Make sure you keep all your moving-related receipts. They could be tax deductible, depending on why you’re moving. Talk with a tax advisor to see if you’re eligible.
To make moving into your new place as easy as possible, pack a separate bag for everyone in your family containing clothing, toiletries, medication, work/homework, bedding and other items they’ll need the first day. Also, put together a moving-in toolkit for assembling furniture, etc.

Trouble-shooting

Things don’t always work out the way we plan -- especially when buying and selling homes. Life can get stressful and costly when you buy a new home before you sell your existing one or sell before you find something you want to buy. The good news is there are options.

In a situation where you need to carry two homes for a limited time, look into bridge financing. Backed by the equity in your old home, bridge financing is a loan to cover the down payment on your new home. It’s a great short-term solution, typically available for prime plus two percentage points.
If you have good credit but your income isn’t high enough for you to qualify to carry a bridge loan plus two mortgage payments, consider a no-ratio mortgage, which doesn’t take into account your debt-to-income ratio. You’ll incur a higher interest rate but you can refinance later, once your situation is more stable.
Alternatively, you could obtain extra funds by drawing on a line of credit on your old home. The interest rate is likely to be more than a point lower than on a bridge loan. The only downside is that you might have to pay a penalty fee if you sell the home within a year.
Should you need interim housing, there are always short-term rental properties (some even come furnished) and affordable storage facilities. Or perhaps you can even stay for a short time with family or friends.
Have children? Talk to school officials in both neighborhoods to work out the best schedule. For instance, if you’re not taking possession of your new home until the middle of a semester, with proper documentation, a new school may allow your children to start before you officially move in.