Making an Offer on a Foreclosure

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Q: My wife and I saw a home that is in foreclosure. We would like to make an offer but do not know where to begin. Do we call an attorney? Bank? Any help would be appreciated.

A: That's a good question and it depends on the way the foreclosure is being handled.  Traditionally, foreclosed properties were auctioned off on the courthouse steps. The winner needed 10 percent cash on the spot and had 30 days to close with or without a mortgage. These days, there are services that work with properties in foreclosure, and realtors that work with them. You'll need to do a little research to see if there's a realtor handling this and engage him or her. It's important to be prepared with a pre-approval to make as strong an offer as possible.

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Q: I have lived in my home for four years and my mortgage rate is 5.25 percent for a 30 year fixed. Does it make sense for me to refinance at the current rates? How do I figure out what I would be saving each month? What are the current rates?

A: The traditional rule of thumb is that a savings of 1 percent makes it worthy to refinance. In your case, that should be true as long as you have good credit and equity in your home. However, there are plenty of cases where people have refinanced for less because the monthly savings made sense to pursue. It's a little difficult to nail down exact savings without speaking to a mortgage professional as we have to account for closing costs in the new loan. But if you have good credit (it may make sense to check this on your own) and a feeling you have at least 20 percent equity in your home, you can get current mortgage rates off the internet and plug it all into a mortgage calculator (also available on the internet) to get an initial idea as to whether it is worth taking that next step.

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Q: We've lived in our home in suburban New Jersey for over 25 years. Currently, the large, irregularly shaped property is demarcated by a few survey posts, but some are missing, and it looks as though a few of my neighbors are encroaching on my property. I may be looking to sell in a year or so, and want to avoid any issues regarding the property line encroachment or possible liability issues when the time comes. I'm looking for your advice as to what to do both now and in the future.

A: You might want to consider investing in a new survey, or an update to the existing survey, to see if neighbor encroachments exist and to deal with them, amicably, prior to selling. Things like woodpiles can be relocated easily, while structures are trickier, but it is always easier to deal with these items when time is on your side.

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Dottie Herman is CEO of Prudential Douglas Elliman. If you have a real estate question for Dottie, please send it to; Reporters@WPCnews.com