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Expert Advice on Buying a Foreclosed Home: An Interview with Moses DeWitt of DeWitt Law Firm, P.A.

By Moses Dewitt

Please tell us a little bit about your firm and the areas of law that you practice.

We are a boutique firm comprised of six attorneys with offices in Orlando and Tampa. We are a full-service firm offering representation in real estate law, including foreclosure defense, short sales, loan modifications, commercial and residential transactions and closings, community association law, land use and environmental law. We also have attorneys who practice in the areas of family law, general civil litigation and personal injury.

Can you briefly describe the main ways that buying a foreclosure is different than buying a typical home?

The largest difference between purchasing a foreclosed home versus a typical sale is the lack of negotiation in foreclosure contracts. The banks have all created standard addenda that control the terms of the sale. Typically all closing costs are shifted to the buyer, and the addendum cannot be altered or amended, making it a truly "take it or leave it" transaction. Another large difference is the banks do not make any disclosures in foreclosure sales, which makes a good inspection that much more important.

What are some of the biggest challenges that prospective homeowners face when they want to buy a foreclosed home?

The government has made it easier to obtain financing on foreclosures through programs such as homepath, which allows for financing for repairs and construction on the home. However, for those individuals that need a move-in ready home, it becomes difficult to purchase a foreclosure due to the work that will likely need to be done to the home. Many times these properties have sat unattended for an extended period of time. The result is an overall deterioration of the home that needs attention prior to occupancy.

What role does an attorney play in the process of buying foreclosed homes?

The primary role of an attorney is reviewing the bank's addenda and closing documents. Most banks have gotten to the point where they require a buyer to obtain counsel to review the purchase contract and addenda for foreclosed properties. While it is good practice to have counsel on such issues, the biggest role of the attorney will be to ensure that the bank can convey clear title to the buyer.

The foreclosure process is messy, and there are times when the bank lists homes for sale that they ultimately do not have the right to sell. Last minute motions to vacate sales, judgments, etc., do not always convey to the REO department at the bank and thus the home can be under contract for sale when the bank does not even hold title. This is where an experienced real estate attorney can make a huge difference.

Ideally, when should the buyer of a foreclosure consult with and/or hire a lawyer?

The best time to seek counsel is before an offer is signed. Once signatures hit the paper, it becomes more difficult to negotiate and/or get out of the contract.

Do you have any advice to help people in Florida make buying a foreclosure as smooth as possible?

Do your due diligence! A buyer should seek out a real estate agent who is familiar with foreclosure sales. Foreclosures operate differently from traditional sales in the way that offers are submitted, and if your real estate agent is not familiar with the process you could lose the house. All buyers should seek counsel to assist through the process as well. The upfront cost of an attorney is well worth the investment to help avoid the many potential pitfalls with foreclosures. Lastly, get a good inspection of the property.

What's the best way for people to contact you and your company?

We are available 24 hours a day through phone or email. In Orlando, inquiries can be directed to moses@dewittlaw.com or you can call our office at (407) 245-7723. In Tampa, inquiries can be directed to Andrewhoek@dewittlaw.com or you can call our office at (813) 251-2701.

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