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Expert Advice on Buying a Foreclosed Home: An Interview with Rachell Horbenko, Attorney at Law

By Rachell Horbenko

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

My name is Rachell Horbenko. I have been an attorney for about 14 years and in my own practice for about 11 years. The focus of my practice is all things real estate. Prior to starting my own practice, I worked for a major real estate developer, a major corporation and a boutique firm's real estate division. My goal for all clients is to have the best experience as possible, through constant communication, advocacy and extensive knowledge of real estate law and the real estate market. I am also a licensed real estate managing broker as well and have been a landlord of multi-unit buildings for about 15 years.

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

Purchasing a foreclosed home is different than purchasing from a third party Seller because you are negotiating with a bank and their law firm instead of an individual. Many times, these banks have a huge volume of properties that are for sale and response times are much slower than negotiating with an individual Seller. Banks also will not or cannot make any representations or warranties about the condition of the property, status of permits, violations or damage to the property. These properties are almost always sold "as-is", which means that you will be doing an inspection of the property basically to decide whether or not you want to move forward. Banks will occasionally make repairs or give credits for repairs, but it is not common. It also may take time for the bank to de-winterize the property or turn on water, electric or gas if they have been turned off, thus delaying the process and your ability to do an inspection.

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

My recommendation to anyone purchasing a foreclosure first of all, is to be patient. There may be lag times in between correspondence and this is normal. The other main thing is, HAVE A HOME INSPECTION. Always. Even if it's a condo. If it's a single or multi-family home, have a thorough inspection of the inside and outside of the property. Many times these properties have been sitting vacant for a long period of time and that can be problematic. People who have been in the process of foreclosure also likely have not had the money to do regular maintenance on the home, and the condition of the home may have suffered as a result. I have also seen homes that have not been properly de-winterized, or properties that have been stripped of appliances, piping and other major items.

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

As an attorney, my main goal is protection of my client's earnest money and their interests. I help to make sure all deadlines are met, and advocate and negotiate whatever terms are needed in order to satisfy my client. I have very similar responsibilities as in any deal: Attending closing and reviewing and explaining loan documents, reviewing title and deed to make sure it is clear, and just generally to make sure the lender has what they need in order to close. Keep in mind, too, with a single family home or a multi-family home that is a foreclosure, the lender will not provide a survey as in a third party deal. It must be done at buyer's expense. And sometimes the bank will refuse to pay customary transfer taxes and pass that charge on to the buyer. These are all things I discuss with my buyer ahead of time.

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

Getting an attorney involved sooner rather than later is always better. In foreclosed deals, you will not only have your standard contract which your agent will submit to the bank, but the bank will come back with a multi-page rider or addendum to their contract which is specific to their bank which the buyer will need to sign. It's always good to have an attorney review all of these items ahead of time, because the bank typically does not allow a regular attorney review process or changes to be made once it's signed as it in a traditional deal.

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

My firm can be reached a variety of ways. My e-mail address is, or My office/cell number is 773.818.9054 and my website address is

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Phone: 773.818.9054

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