April 21 (Sat) New England Mobile Book Fair - 11 am- 4 pm 82-84 Needham St. Newton – Green Decade and our “Magic Energy Bike” will be featured by the New England Mobile Book Fair!  

April 22 (Sun) Whole Foods Markets 916 Walnut St & 647 Washington St - Reduce your carbon footprint and help support Green Decade Newton with a purchase of a vegan product. Both Whole Foods Markets in Newton will donate $1 for each vegan bakery item sold in their Bakery departments. From 2-4 pm at the Walnut St. Store there will also be a garden workshop!

This article comes from Green Decade Newton

April 30 (Mon) – 7pm at the Newton Free Library, Druker Auditorium, 330 Homer St, Newton  Dr. Brenda Ekwurzel, a climate scientist at the Union of Concerned Scientists and co-author of the book Cooler Smarter: Practical Steps for Low-Carbon Living, will discuss the most effective ways to cut your own global warming emissions by 20% or more. Dr. Ekwurzel is Assistant Director of Climate Research and Analysis with the Union of Concerned Scientists. She holds a Ph.D. from the Department of Earth Sciences at Columbia University's Lamont-Doherty Earth Observatory and conducted post-doctoral research at Lawrence Livermore National Laboratory, in California.

This article comes from Green Decade Newton

MBTA Proposing to Eliminate Several Newton Bus Routes.

The routes include bus 52 (Centre St.to Parker to Dedham); bus 170 (Waltham to W. Newton to Boston) and express buses 500, 554, and 555.  All Newton bus routes are under consideration for reduction or elimination.  These changes would put more cars on our roads, increasing traffic congestion, air pollution, and noise (road traffic is the most important single source of noise in urban environments).
 
Green Decade/Newton believes good public transit system is crucial to the livability of our villages and vital to the economic, social and environmental health of our region.  We urge the MBTA to look for other alternatives that will encourage and strengthen public transit.
 
You have until March 1 to tell the MBTA what you think by e-mail to fareproposal@mbta.com; by regular mail to MBTA attn:  Fare Proposal Com., 10 Park Plaza, Boston, MA 02116; by phone 617-222-3200/TTY 617-222-5146.

This article comes from Green Decade Newton

The fact is, when you’re trying to qualify for a home loan, some of the items on your credit report that can pose a threat to your home finance plans might surprise you. Here are 5 surprising credit report entries you absolutely must fix, especially when you are in the process of buying or refinancing a home.

1.     Account balances you recently paid down or off. If you’ve just finished paying a bill down or off, you might not dispute the elevated balance that remains on your credit report because it’s not actually an error, per se.  But the whole point of paying the balance down was to bring down your credit utilization ratio, which is a heavily weighted factor in your overall credit score. 

Correcting the actual balances of your outstanding bills downward to account for your recent pay-down efforts poses such a large potential improvement impact for your credit score that it might even be worth paying your mortgage professional the $30 to $50 it will cost for them to initiate a Rapid Rescore, which can update your reports to reflect your slimmed-down balances in about 72 hours, compared with the 30 to 60 days you’d expect to wait to see results from a traditional dispute or update.

2.     Incorrect former addresses. Of the 19 percent of consumers who spotted an error on their report in the study, nearly 40 percent of those errors were in what the credit bureaus call “header data," things like the consumer's previous street address. Many elected not to dispute these sorts of line items because the error doesn't seem like it would impact their credit score.  While an inaccurate address might not have much to do with your score, it can still wave a red flag, signaling issues that can foul-up your mortgage application.

A misspelling in an otherwise correct street name should not cause you grave concern.  But if the previous addresses listed are in the wrong city or state, or otherwise come out of nowhere, they might signal that someone has used your name and/or social security number to obtain credit at a different address.  Credit card fraud and identity theft are difficult to unravel when you’re not seeking credit; they are much more complicated to resolve when the credit stakes are high and the underwriter as picky as they are in the course of applying for a mortgage.  

Also, current and previous addresses that conflict with where you’ve told the lender you live(d) can raise suspicion that you might be buying a second or rental home, rather than the owner-occupied home you say you’re trying to buy; that can provoke a lender to demand that you ante up more down payment dough, make you jump through greater hoops to prove your true address or even stop you from qualifying for the loan altogether.

3.     Bills that were never yours in the first place. As with completely bizarre former addresses, accounts listed on your credit report that you never opened in the first place can be a red flag that tips you to the fact that someone else might have stolen your identity and opened a credit card or account in your name.  If you find one of these items on one credit bureau report, but it’s currently closed or has a zero balance, you might be tempted to let it slide, thinking it can’t move the needle on your credit score.  In reality, though, if someone is using your identity to obtain credit and you fail to dispute that the bills belong to you, they might continue to use it, which can cause you real problems.  Of course, if the bills weren’t paid on time or have been placed in collection, disputing the accounts’ presence on your credit report is a must.

If they were paid on time every time, though, the analysis might be different.  Unfortunately, instituting a fraud-based credit freeze or fraud alert on your credit reports at the same time as you’re applying for a mortgage can complicate your own loan qualification process significantly.  If you find yourself in this situation, carefully scrutinize the rest of your report and the credit reports you receive from the other bureaus to detect whether other fraudulent accounts exist, then consult with your mortgage professional on exactly when and how you should go about disputing the accounts which weren’t actually yours.

4.     Limits listed as lower than they really are. As with closed accounts that were never yours in the first place, accounts that are listed on your credit report as having limits that are lower than they really are might seem like a battle not worth fighting.  But the fact is that only two inputs go into the credit utilization ratio that comprises about 30 percent of your FICO score: how much credit you have available, and how much credit you have used.  So, if you have account balances that show up on your credit reports as lower than they actually are (i.e., that you have less credit available to use), that inaccuracy can skew your credit score and screw up your mortgage qualifying efforts. Big time.

5.    Derogatory items that should have aged off. Very few of us are perfect, and you might have worked hard to pay your bills on time in an effort to overcome a credit ding from back in the days.  Although the impact a derogatory item has on your credit score wanes over time, it’s still your right (and your responsibility) to make sure negative items disappear from your credit report when they are supposed to – that’s 7 years for a late payment, 10 years for a bankruptcy.  If you are still seeing credit dings on your report after more than the relevant time frame has elapsed, dispute them and claim the rehabbed credit (and score) you’ve since earned.

It’s not very common that credit report disputes cause dramatic changes in credit score, but again, many borrowers aren’t disputing these sorts of items they don’t realize could make a difference in their homebuying or refinancing prospect. 

Beyond that, if you’re close to a credit tier cutoff, like 620-640 or 740-760, depending on your loan type, even a few points’ difference can be the difference in qualifying for a home or not, or paying a higher mortgage interest rate for the life of your loan.  For these reasons, it behooves every potential borrower to be proactive in spotting and correcting these 5 must-dispute errors.

Though the draft bill has not been introduced, titled or assigned a number, it is expected to be the main subject of a hearing Wednesday before the Subcommittee on Insurance, Housing and Community Opportunity, chaired by Rep. Judy Biggert, R-Ill. After that, the bill is likely to be formally introduced and sped through subcommittee and committee votes and head for action by the full House.

By lowering maximum FHA loan limits in large numbers of local areas - well below even the limits that are already scheduled to kick in Oct. 1 - the bill would squeeze down FHA loan volume across the country, cutting a resource for some home purchasers who can't obtain a conventional mortgage. Most New England and mid-Atlantic states would end up with lower loan ceilings along with major markets in the Midwest and the Rocky Mountain states.

To read the full article from Inman News, click here

If you have a lot of equity (say 40% or more) you may find a private investor to loan you the money but the cost would be prohibitive.  You need to focus on getting the home sold.

Sellers: avoid being at home while your home is being shown. 

Buyers: save your commentary for your agent; if you do encounter the seller in person keep your conversation respectful and avoid critiquing the house or the list price.

2. Being unqualified for mortgage financing. When a seller signs a buyer’s offer, most often the seller agrees to effectively pull the home off the market, forgoing other buyers who might be interested.  As such, the only thing worse than getting no offers on your home is getting an offer, getting into contract, then having the whole thing fall apart when the buyer’s loan falls through – especially if that could have been predicted or avoided up front.

Sellers: Work with your agent to vet your home’s buyers’ qualifications, including their loan approval, down payment and earnest money deposit – before you sign a contract.  It’s not overkill for your agent to call the buyers’ mortgage pro before you sign the contract and get a level of comfort for how robust their qualifications are. 

Buyers:  Get pre-approved.  Seriously.  And make sure that you don’t buy a car, quit your job, deposit lottery winnings or do any other financial twitchery between the time you get loan approval and the time you close escrow on your home.

3. Making unjustified lowball offers. No one likes to feel like they are being taken advantage of.  And sellers generally know the ballpark amount that their home is worth, as well as what they need to sell it for to get their mortgage paid off.  Yes – the price you pay for a home should be driven by its fair market value, rather than the seller’s financial needs, and deals are more available in a market like the current one, in which supply so vastly outpaces demand. But just throwing uber-lowball offers out at sellers hoping one will hit the spot is not generally a successful strategy, especially if you really, really want a given property.

Sellers:  Don’t get overly emotional about receiving a lowball offer; counter at the price you and your agent decide makes sense based on the total circumstances, including your motivation level, recent comps and the interest/activity level your listing is receiving.

Buyers:  Work through the similar, nearby homes that have recently sold (a/k/a comparables) before you make an offer to factor the home’s fair market value into your offer price – also factor in how much you want the place, too.  Don’t be amazed if you make an offer far below asking, and don’t get a response.

4. Renegotiating mid-stream. Sellers plan their finances, moves and  - to some extent – their lives around the purchase price a buyer agrees to pay for their home.  If you get into contract to buy a home, find out during inspections that costly repairs need to be made, then propose a lower sale price, repair credit or even actual repairs to the seller, that’s sensible and fair.  But if you were aware that the property needed a lot of work before you made an offer on it, then you come back asking for beaucoup bucks’ worth of credit or price reductions midstream, expect the seller to cry foul.  And holding the seller up two weeks into the transaction because you caught a case of buyer's remorse? Not cool, and not likely to foster the spirit of cooperation you may need to get your deal closed.

Sellers: avoid mid-stream price renegotiations by having a full set of inspection reports and repair bids at hand when you list your home.

Buyers: try to avoid renegotiating the entire deal unless you get some major surprises at your inspections or inflating small repairs to try to justify a major price cut.

5. Misleading or setting the seller up.  Remember when we talked about buyer turn-offs?  Being misled by listing photos or very fluffy property descriptions was high on the list.  The same goes for sellers.Offering way over asking with the plan to hammer the seller for a reduction when the house doesn’t appraise at the purchase price?  #LAME  Making an as-is offer planning the whole time to come back and ask for every penny ante repair called out by the inspectors?  Lame squared.

Sellers:  If you get multiple offers and are tempted to take a sky-high one or one that claims to be all cash, consider requesting proof that the buyer has sufficient funds to make up the difference between what you think the home will appraise for and the actual sale price, and statements showing the cash truly exists. 

Buyers: Don’t be lame. I’m not saying you have to tell the seller exactly what your top dollar is, but making offers with terms designed to intentionally mislead is really, really bad form – and can result in losing the home entirely if and when your bluff gets called.

1. ID (e.g., driver’s license, state-issued ID, passport).  Who must produce it?  Buyers and sellers.  Why?  Uh, hello!?!  Lender wants to know that you are who you say you are, buyers, and the title insurance company wants to make sure, sellers, that you actually have the right to sell the home.  Funny enough, this commonly goes unrequested until you get to the closing table, when the notary requests to see it before signing, but some mortgage brokers and even some real estate brokers and agents may ask to see it earlier on.
2. Paycheck Stubs.  Who must produce it?  Any buyer financing their purchase with a mortgage.  Sellers, usually only in the case of a short sale.  Why? Buyers’ purchase price ranges are determined, in part, by their income. And short sellers have to prove an economic hardship.
3. Two months’ bank account statements. Who must produce it?  Buyers getting financing; sellers selling short. Why? Buyers’ lenders now require proof of regular income and proof that the down payment money is your own.  Short sellers?  It’s all about the hardship.
4. Two years’ W-2 forms or tax returns. Who must produce it?  Mortgage-seeking buyers and short selling sellers. Why? Banks want to see a stable, long-term income. They also limit you to claiming as income the amount on which you pay taxes (attn: all business owners!). And in short sales, again, they want documentation of every single facet of your finances.
5. Updated everything. Who must produce it? Buyer/mortgage applicants. Why? Because things change, and because the time period between the first loan application and closing can be many months - even years! - on today’s market. During the time between contract and closing it’s not at all unusual for underwriters to demand buyers produce updated mortgage statements, checks stubs, and such - and its quite common for them to call your office the day before closing to request a last minute verification of employment!
6. Quitclaim deed. Who must produce it?  Married buyers purchasing homes they plan to own as separate property.  Married sellers selling homes that they own separately, or joint owners selling their interests separately.  Why? With the Quitclaim Deed, the other spouse or owner signs any and all interests they even might have had in the property over the the selling owner, making it possible for the title insurer to guarantee clear, undisputed title is being transferred in the sale.
7. Divorce decree.  Who must produce it? Buyers and sellers who need to document their solo status or the property-splitting terms of their divorce. Why? Again, to ensure that the seller has the right to sell.  Recently single buyers might need to prove that they shouldn’t be held to account for their ex’s separate debts or credit report dings.
8. Gift letters.  Who must produce it? Buyers using gift money toward their down payment.  Why? The bank wants to be sure the gift came from a relative, and is their own money to give.  They also want the relative to confirm in writing that it’s a gift, not a loan - a loan would need to be factored into your debt load.
9. Compliance certificates. Who must produce it? Usually sellers, but sometimes buyers, by contract. Why? Some local governments require various condition requirements be met before the property is transferred, like some cities which require a sewer line be video scoped and repaired, cities which require a checklist of items be met before a certificate of occupancy be issued (usually relevant to brand new and really old homes, the latter of which are often subject to lead paint concerns) and energy conservation ordinances which require low-flow toilets and shower heads to be installed. Ask your real estate pro for advice about which, if any, such ordinances apply in your area.
10. Mortgage statements. Who must produce it?  Any seller with a mortgage. Why? the escrow holder or title company will need to use them to order payoff demands from any mortgage holder who has to get paid before the property’s title can be transferred.

By no means is this an exhaustive list.  Agents: what documents do you see buyers and sellers struggle to scrounge up during their home buying transactions?

By sitting on the sidelines for the last 90 days a purchaser lost:

$89.44 a month
$1,073.28 a year
$32,198.40 over the thirty year life of the mortgage
If you buy a $340,000 home, double all these numbers.

Bottom Line

Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.

Few homeowners know that energy-efficiency upgrades can get them tax credits. Fewer know that with an energy-efficient home, they lessen their carbon footprint and contribute more to making their communities sustainable. An EEM makes both of these possible.

The New York Times reports that less than one percent of all mortgage loans are green mortgages, quoting industry stakeholders. Over the past few years, more and more people are getting concerned about the energy performance of their homes. Environmentalists and industry stakeholders alike hope that green mortgages increase to prop up the already weak mortgage market.

What’s Covered by an EEM?

An energy-efficient mortgage is a loan homeowners take out to improve the energy efficiency of their homes. Proceeds from these loans can be used to purchase upgrades such as double-paned windows, geothermal water heaters, modern HVAC systems, radiant heat barriers, and improved insulation. Even the installation of solar roof panels can be financed with a green mortgage.

The Department of Housing and Urban Development (HUD) website states that an EEM “means comfort and savings.” An energy-efficient home benefits from lower maintenance costs and additional savings on energy costs, giving the homeowner additional cash derived from lower utility bills. This extra cash can be used for housing expenses. The HUD argues that if homeowners have more cash, then they have more purchasing power to acquire a better, newer, and more comfortable home.

On the Rise

In its Environmental Certification Report released February 2010, Greenworks Realty reports that the uptake of environmentally certified new homes in Seattle were increasing, selling faster and getting more share of the realty market. Greenworks Realty, founded in 2002 as the first full-service real estate brokerage based in the U.S. to focus on the green real estate market, based their data on the Northwest Multiple Listing Service (NWLS).

Melissa Tracey, writing for REALTOR Magazine, cites the Greenworks Realty report along with a report by the Earth Advantage Institute. The institute’s report culls data from the Regional Multiple Listing Service of Portland, where the same thing happened: The uptake of environmentally certified homes — new and existing — increased.

The U.S. government is very aggressive in promoting energy efficiency among homeowners. The website of the US Department of Energy is a rich trove of information for saving money and energy at home. The site posts information about rebates for Energy Star-certified appliances and even instructions for conducting one’s own energy assessment.

The site also offers a downloadable PDF containing energy-saving tips. In it, you’ll find relevant and vital information about energy efficiency, as well as data showing how much an average American household spends on heating and cooling alone.

The HERS Report

Filing for an EEM is a positive option, considering the rising costs of fuel and maintenance. But how does one get an EEM?

One of the requirements of an EEM is a Home Energy Rating System (HERS) report, written by a licensed Energy Rater.

Akin to the mileage rating of a car, the HERS report evaluates an individual home’s energy efficiency. A licensed Energy Rater, either hired by the buyer, seller, lender, or the real estate agent, inspects the home and factors in insulation, appliances, window types, local climate, and utility rates to create a report covering the following:

• Overall Rating Index (ORI) of the house
• Recommended energy-efficiency upgrades
• Cost estimates, projected annual savings, and life expectancy of upgrades
• Improved Rating Index (IRI) after the upgrades
• An estimate of the annual total energy cost of the home before and after the upgrades

The HERS report also includes how much money can be spent in upgrading the energy efficiency of a property.

Advantages of Green Mortgages

Homeowners who have green mortgages get to qualify for larger loans for better properties. With regular mortgages, homeowners can only qualify for a maximum allowable monthly payment of 29% of their total monthly income. Compare this to the maximum allowable monthly payment for a green mortgage: up to 33% of their total monthly income.

The savings incurred from lower utility expenses begins on Day One, as the installed features — such as geothermal water heaters and improved insulation — use less energy. Other energy-efficiency measures, such as radiant heat barriers and double-paned windows, increase the occupants’ comfort.

The resale value of the home itself increases once it is environmentally certified, as it has both improved comfort and energy-saving features. Owners of existing homes obviously benefit from an EEM, since they are increasing the resale value of their existing property and, at the same time, saving money instead of using it for maintenance and improvements.

An EEM is not a loan made separately; it goes in combination either with your existing mortgage or in applying for a new mortgage loan. If an individual homeowner qualifies for a regular mortgage, then automatically he/she qualifies for a green mortgage. The payment for the green mortgage and the regular (or refinanced) mortgage is combined, so a borrower needs to only make a single mortgage payment every month.

Pick the EEM Just for You

There are three types of green mortgages. So far, all green mortgages have been designed for individual homeowners; no commercial version of an EEM exists for small and large businesses. Lenders offer the following types:

• Conventional EEMs are guaranteed by Fannie Mae and Freddie Mac. Borrowers who are applying for conventional EEMs can get as much as 15% of their home’s appraised value.
• FHA EEMs are not as flexible as conventional EEMs, but FHA EEM borrowers benefit from FHA financing. Home owners can borrow up to 5% of a home’s appraised value, but not more than $8,000.
• VA EEMs are for current and former military personnel. These EEMs allow borrowers to get up to $6,000 for upgrades when buying an existing home. A VA EEM does not factor in the appraised value of the prospective property.

Sustainability as an Issue

Sustainability has definitely become one of the factors in the increasing interest in green homes. The past years have seen spikes in fuel prices and rising costs of energy. The current economic downturn has also affected interest in new homes, with an increased number of mortgages going underwater.

Energy efficiency does more than lessen utility bills; an environmentally certified home is also a healthy home. Improved insulation and modern HVAC systems lessen exposure to pollen, dust, and other air contaminants. The longevity of a house is extended by improved insulation and radiant heat barriers, protecting wooden structures from moisture and termites.

All these improvements lessen a household’s impact on the environment, and thus directly contribute to creating a sustainable community.

The American Council for an Energy-Efficient Economy considers energy efficiency and renewable energy as twin pillars of sustainable energy. In this respect, an energy-efficient home is definitely a model of sustainable energy, as it uses less energy to maintain and may even use renewable energy through solar and wind power.

Tax Incentives for Green Homes

Owners of environmentally certified homes can benefit from tax breaks for Energy Star-certified appliances and energy-efficiency upgrades. According to the Energy Star website, there are federal tax credits for some Energy Star-certified products.

Homeowners can enjoy tax credits for their energy-efficiency upgrades and appliances. For example, by installing an advanced, main air-circulating fan, homeowners may qualify for a 30-percent tax credit. Installing bulk insulation, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place polyurethane foam will get homeowners additional tax credits, if they install the insulation themselves. Solar water heaters and solar panels also qualify for tax credits.

Kim Vatis, writing for NBC Chicago, says homeowners with energy-efficient properties can get as much as $500 tax credits.

With the current financial crisis and the increasing awareness on sustainability, green mortgages will continue to flourish, leading to more energy-efficient homes and communities.

(This article is brought to you by Blue Planet, Green Living)

Tips to Longer Lasting Counters:

• Wash wood countertops immediately after using especially when it comes to moisture containing stains, scraps and spills.
• Oil wood countertops once a month with a high quality mineral oil. Only mineral oil is food safe and won't turn rancid like cooking oils.
• Avoid contact with vinegar, which is acidic enough to dissolve the glue holding the wood together.

Oiling Your Countertops—What You Need:

• Food safe mineral oil
• Sand paper (120 & 180 grit)
• Lemon Wedge
• Salt
• Hydrogen Peroxide
• Two rags

Instructions:

1. Stain Removal
Remove any stains using a fresh lemon. Cut in half, and rub the stained area with the cut side. Salt can be added for extra abrasion. If that still doesn't work, try adding 1 tablespoon hydrogen peroxide to a cup of warm water and dab it on the stain.

2. Clean Thoroughly
Use a sponge to wipe down the entire surface with a non-toxic cleaner. Let dry.

3. Sanding
Sand the surface lightly (with the grain) thoroughly with 120 grit sandpaper. Sand again with 180 grit sandpaper until the wood is smooth.

4. Applying Oil
Drizzle food-grade mineral oil liberally onto the counters and rub in well with an old cotton rag. Allow the wood to soak in for 20-25 minutes.

5. Wipe Clean
Wipe clean with a clean rag and enjoy your renewed surface.

My fiance and I are currently in the market for a home and it is always difficult being a home buyer, I completely understand.  Just imagine how difficult it would be if you were the buyer as well as the agent.  Trying to take a step back, gauge what your partner is looking for in a home as well as yourself and view properties that match both of your criteria.  It is not easy, let me tell you... especially when your non real estate partner is not into looking at homes or is very picky (which my partner is both).

We have been finding homes lately that have sort of met our criteria, nothing that is a slam dunk.  Then last night, right before going to bed, I found this really neat property and showed it to my fiance.  He was always talking about how important the flow of the home is and how he wished every home had a floorplan available and this one had it - we were hooked.  We wanted to see this place, only catch was, he was headed out of town for the week for business and wouldn't be able to see it until the following weekend.

So I called up the agent to find that after only being on the market for a total of 4 days, and having 1 open house, this place already had 4 offers on it and was going to finalize the offer by this morning.

No way we would be able to get in to see it next week. 

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Lesson learned?  Good homes sell FAST!  I can not reiterate this enough.  Too many people think that because this market might be considered a buyers market, it isn't the case with a good quality, well priced home.  Those properties are priced to move, and yes they move.

When you find a home that you feel is "your" home, you may want to move on it before the competition swoops in.  Its hard enough to find the right home, its even more difficult when someone takes the home that you finally think is "it."

• that buying a foreclosure might involve hidden costs,
• that the buying process itself is risky, and
• that the home might continue to lose value, after escrow closes.

While there certainly are risks that run with buying a foreclosed home, the most risky way to do it is also the least common method: at the foreclosure auction itself. Auction buyers often don't have the opportunity to fully vet the foreclosure to ensure that they are receiving clear title and/or to make sure they're not getting a lemon. With that said, most foreclosures are resold not at the foreclosure auction, but as an REO (short for Real Estate Owned - by the bank), listed by a real estate broker on the Multiple Listing Service and on Trulia!

When you buy an REO in this way, you have lots of opportunities to use some tricks of the trade, so to speak, to avoid some of the traps you may fear. Here are my Top 4 Tricks and Traps for Foreclosure Buyers:

1.  As-is means as-is, period.  (Most of the time.) Banks have very little interest, inclination or even the logistically necessary resources to execute repairs on your home. Many of these homes are managed by an asset management company in another state, and may not even have a local person besides the agent who can handle large repairs. Generally speaking, bank-owned homes are sold on a very strict "as-is, where-is" basis, which just means that you should expect to take possession of it, if you buy it, in exactly the position and location it is, no matter how defective.  Do not walk into a viewing of a foreclosed home, notice how the plumbing is all ripped out of the wall, and make an offer for it, assuming you'll be able to get the bank to "fix" the issue later.  Usually, if the bank is willing to do any repairs to a foreclosed home, they do so, on the advice of the listing agent, prior to the home being listed.

Out of hundreds of foreclosure transactions I have personally been involved in, I have seen exactly four where the bank did agree to do some level of repairs at a buyer's request.  Every one of those times, the repair was to fix a health-and-safety endangering property defect, like a gas-leak or an electrical fritz. And every one of those times, the property defect was highly non-obvious - not something even a diligent buyer could have detected visually prior to making an offer.  Maybe another few times I've seen a bank agree to a small price reduction due to surprising condition problems.  And dozens of times, I've seen transactions fall apart or buyers take on the property’s repair costs, when they request repair credits, price reductions or actual repairs from the ban seller.

If a foreclosure you're considering has obvious property damage, have your contractor stop by with you or gather whatever information you need to get as comfortable as possible with your offer price, assuming that the bank will not be chipping anything in for repairs, before you make the offer.

2.  The bank speaks no evil.  When it comes to real estate disclosures, the fact is, the bank speaks not much of anything!  Many states exempt banks and other types of corporate homeowners from making substantive disclosures about the condition of the property.  Even in jurisdictions where the bank is not legally exempt, most banks will simply write across the required disclosures something to the effect that the bank has no knowledge of the property's condition.  (Before you protest with a "that's not fair!!" keep in mind that the bank never lived in the property, so most often truly does have no idea of any important facts or details about its condition or location, the things an average home seller would be required to disclose.)

Even in a normal transaction, it behooves a buyer to be thorough in having the property inspected and meticulous about reviewing the resulting inspection reports.  But buying a foreclosure ups even that ante, as you have no seller disclosures to highlight particular problems you should have looked at, and none of the usual legal recourse you would have if a “regular” seller made incomplete disclosures.  Get a property inspection.  A pest inspection.  A roof inspection.  A sewer line inspection. A pool inspection, if you have a pool and care about its condition.

Yes - all these inspections cost money, but the drama and thousands each of them can save you is well worth it. And read your state’s buyer inspection advisory or similar document (ask your agent), just to make sure you’re aware of all the inspections that are available to you, and work with your agent to determine which ones make sense, and which are not appropriate.

Some insider tips:
Vacant foreclosures often have their utilities disconnected.  Work with your agent to make sure the utilities get turned on - even for a single day - so that your property inspector can run the water taps, test the stove and dishwasher, see if the water heater and electrical outlets work, and so forth.
If appliances are there, the bank will probably leave them there, even though they may not have technical “legal” ownership of them, so they may not be included in the contract, like in a "normal" home sale.
However, the bank will not give you any sort of warranty on appliances, so try to obtain any warranty coverage you want or need elsewhere - from a home warranty company or, potentially, the original manufacturer/retailer.

3.  The contract terms, they are a changin'. One thing squarely in the wheelhouses of local real estate pros are local market standard practices.  From negotiating practices to which party pays which closing costs, every market is different, and experienced local agents are experts on this information.  If you’re buying a foreclosure, though, the bank will often require you to use it’s own purchase contract, rather than the more commonly used state forms.  Many times, this is done to advise the buyer of the bank’s refusal to make substantive disclosures (see above) and to change some of the normal practices for your area to the bank’s standard practices.  

For instance, if you are buying a home in a contingency state, where you would usually have to sign a document proactively releasing contingencies, the bank’s contract will probably change that, so that your transaction operates on an objection period. In "objection" based transactions, you  have a certain period of time in which you must either speak up about your concerns with the property and/or cancel the deal, or you will automatically be presumed to be moving forward with the deal and your deposit money will be forfeited if you change your mind after that date.  

If you’ve been making offers on non-foreclosures on the standard contract form, or you’ve bought homes before and think you know the drill, please - I implore you - READ every word of the contract you sign when you buy a home from the bank, and ask your broker, agent or attorney to explain anything that doesn’t make sense.

4.  Expect the unexpected.  When you buy a foreclosure, you might end up working with the bank’s escrow company, instead of a company you or your agent selects.  And the bank's escrow provider might be slow or disorganized.  C’est la vie. The bank might rush you for your deposit money, but take their own sweet time coming up with the necessary signatures on their end to close the deal.  Par for the course.  You might expect that the bank would be desperate for buyers, and instead find out that there are 20 offers on the same REO.  Or, you might be the only offer and still get your aggressively low (but still reasonable) offer rejected, only to have the bank reduce the list price of the home to the same price of your offer!  (They often want to see if exposing it to other buyers at the new, lower list price might generate more interest and higher offers.)  

When you’re buying a foreclosure, expect glitches, expect your calendar to be derailed, expect the bank to be inflexible and possibly even unreasonable.  It’s not overkill to ask your broker or agent to brief you on the common complications they see in REO transactions.  Having realistic expectations may keep you from pulling your hair out.  And if the transaction turns out to run smooth as silk?  You’ll be pleasantly surprised.