Dear Ms. Lank: I have spoken to three different brokers about buying a foreclosure. Every one tried talking me out and didn't want to help with whatever questions I had about the process. A friend of mine then told me that agents don't make much by selling foreclosures. If that's true, then how can I find someone that wants to help? — J.

Answer: Property being foreclosed is sold at public auction, and real estate brokers are not involved. Local procedures vary, but if you make the winning bid, you might, for instance, have to make a cash deposit immediately and come up with the rest within a month. Those who make a business of buying foreclosures often have a line of credit all set up and ready.

You must buy sight unseen; the homeowners losing their property don't have to let you in to inspect. You should have guidance through the whole process from a real estate lawyer to make sure you aren't buying into any legal problems.

If, on the other hand, you're talking about property that's already been through an auction or a short sale and is now owned by a bank, that's a bit different. It's known as REO ("Real Estate Owned") property. An agent can help you buy that, but it can be a frustrating process that requires a lot of patience. You're dealing with committees and it's seldom as simple as buying from an individual homeowner. And banks aren't allowed to just give the property away; they're required to get fairly good prices.

Lots of books are written about buying foreclosures. Go to the library, start studying and find yourself a lawyer.

Get It Settled First

Dear Edith: I wanted to pass something along to your readers. In my career both as an agent and a personal investor, almost every time I have had a problem, maybe something unfinished, a boundary issue, whatever, and the seller says, "Oh, yeah, that's already solved. Everyone has already approved everything, I just had not gotten around to it" — alert! — it never works out! Either it's an outright lie, or the people who approved it can't be located, or there were no permits, whatever.

So folks, the next time a seller says, "Oh, I just had not gotten around to it," your response should be, "Well, we have a closing in 45 days. So I'd say you have 45 days to get around to it."

It's taken me much grief to learn that lesson. — L. B., Broker

Nothing Down

Dear Ms. Lank: My husband and I decided that we are going to buy a home in the beginning of next year. It will be our first home. Anyway, my father-in-law advised us to put some money down on our new home. Here lies the problem. I do not want to put any money down. I am still afraid of the housing market. What if we put a $15K down payment on a $200K home and a year later, our home is only worth $150K? Can you tell me if we are making the right decision if we go into a home with no down payment? — M.M.

Answer: I doubt you're going to have that option. Lenders are tightening up their requirements these days. A VA mortgage is available to qualified veterans with nothing down. Otherwise, you're going to be asked for a down payment.

Mortgage And Debts

Hi: We are thinking about buying our first home. Is it possible to roll our current debt in with the loan for the house? Otherwise, we will be unable to afford it. We have done the math and if we could combine the two we would not have any problems. Not sure how this works. — G.O.

Answer: How a mortgage loan works is this: The lender gives you most of the money you need to buy your home. You make up the rest with a cash down payment. You promise the lender that if you don't repay the loan, they can have the property sold at auction to pay off the debt.

Lenders want to be sure an auction would bring enough to cover that debt, so they won't lend more than the value of the house — almost always, less.

Any real estate broker or mortgage broker can explain the process and analyze whether you'd qualify for a mortgage loan.

Transferring License

Ms. Lank: I have a real estate license in Ohio, and am moving to New York. Can my license be transferred? — Via e-mail

Answer: No. New York has no license reciprocity with Ohio. You'll have to start over, with the required salesperson's course, which was recently raised to 75 classroom hours. Or if you have enough experience, you may be OK to take the advanced broker's course and apply for a broker's license.

Edith Lank will respond personally to any questions sent to her at 240 Hemingway Drive, Rochester, NY 14620 (please include a stamped return envelope), or readers may e-mail her at ehlank@aol.com.

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