Has anyone ever boughten a foreclosure property?
Monday, June 7th, 2010 at
3:18 pm
My boyfriend and I are going to start saving money to buy a house. Today I was looking at the houses for sale online and a link to foreclosure properties came up. The prices for the foreclosure homes are super cheap. For example a house built in 2004 with 5 bedrooms and 2 bathrooms for about $20,000. Does anyone know if this is true or what is the process of buying a foreclosure property?
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That $20K is the default amount. The house will be sold at auction and if it is even close to being habitable investors will bid it close to market value.
As you are first time buyers I would recommend working with a Realtor. Once properties are foreclosed they end up with a For Sale sign in the yard, just like any other house.
It can be true but I would be skeptical of that house. I currently buy foreclosed homes and that sounds like a great deal but dont see why it would be that cheap if it is in good condition. Be carefull as they are sold as is where is. Get it inspected and have the records pulled on the home. Also get title insurance.
Go talk to a Realtor. Don’t make any commitments, but just sit down and talk. They’ll advise you of how the process works and what to look out for. There are a lot of pitfalls to watch out for and if you’re looking to buy your first house, you’re going to want some help. If you’re looking to buy your first house at a forclosure auction, it would be very foolish to do it without a professional on your side.
I suppose it is possible that they could be selling that cheap, but it could be a mobile home at that price.
The process for buying foreclosed homes varies according to what stage they are at in the foreclousre process. Buying pre-foreclosure usually involves convincing the bank to take less than what is owed on the property. It can be frustrating and time consuming, but it can be done. Bidding at a Sheriffs sale is kind of risky if you haven’t done a title search on the property. There could be 2nd mortgages and tax liens on the property that do not just get erased if you are the successful bidder. Most often the bank takes them back because they are the only one willing to bid what is owed on the property.
You may be best advised to focus on buying bank owned properties. Those have gone through the whole process and are now being sold by the lender who foreclosed (usually through a realtor).
Often, these homes are not in the best condition so you may need a rehab loan to make them liveable. Sometimes they just need some cosmetics and a good cleaning, but then they will be priced accordingly.
Every market is different. You may want to call a couple of real estate brokers who specialize in bank owned properties and tell them what you are looking for and where you want to live. They can search the multiple listing service and pull up properties that meet your criteria as well as comparable sales so that you will know how much the home might cost you.
There is a lot of misleading information on line. Usually, these websites are trying to sell you a membership or something. I would suggest working with a realtor.
Good luck with your home search.
You should do two things:
1. Find a lender and get preapproved so you know what you can afford and don’t waste your time looking at homes you can’t.
2. Find a buyer’s agent who can help you find homes within your price range, advise you and negotiation on your behalf once you make an offer, and help you with all that needs to be done between getting an accepted contract and closing.
I’m about ready to scream with the media convincing people that foreclosures are so super cheap!! Just because a home was foreclosed doesn’t mean you’ll get a bargain, and just because a home wasn’t foreclosed doesn’t mean it can’t be bought at a good price.
Buying a foreclosed home is nearly exactly like any other home purchase except for a couple of details. These homes are normally sold as-is, meaning the buyer pays for no inspections and will not make any repairs based on inspections you choose to get. Anyone can sell their home as-is, but it’s just about standard procedure for banks. Additionally, banks do not rush through the sales process so you can expect longer than normal response times to offers and instead of a typical 30 days from accepted offer to close, expect more like 2-3 months.
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Whatever prices you saw, if they’re not from a reputable site like Realtor.com, don’t put an ounce of faith in their accuracy. If you see a price like that, you can be the home is in crappy shape. A bank is going to try and sell their homes for as much as possible. Even if the previous owner only owed $20K, if the house is worth more than that, the bank will list it for more.
I purchased a foreclosed home, but that was not my intention at all; in fact, I was trying to avoid these properties. I told my agent what I wanted and what I could afford. He sent me all of the homes that met my needs and the right house happened to be owned by a bank. The bank was a nightmare to work with – and the listing agent completely useless – so if my buyer’s agent hadn’t been there busting his tail for me, I’m confident I would not have my house.
It is not. They want you to buy a membership with them, that was most likely a mobile home which had to be moved off the property it was sitting on and notice they dont tell you where it is, it could be anywhere in the us and still not be false advertising. Go talk to a realtor. They (some, many are kind of screwballs) know what they are doing. I bought a foreclosure last year which needed 7k in work, I paid 65k for the house and it is worth 99-109k per the realtor who will be listing it in the fall for us. I am buying another, it needs approx 4k in work, 78k including closing costs is the purchase and will be worth 109-119k approx. We intend to stay in this one though for awhile. Buying as an owner occupant gets you the best rates on loans. You do need to keep in mind though that the property will only be worth 90 percent of its value when you go to sell it later so bid accordingly. Everyone asks for a 3 percent seller concession to cover closing costs and 6-7 percent goes to the realtors for selling your house/bringing an able buyer to the table. You may also have a termite inspection, pre sale inspection etc.
first home was 35 days from accepted offer to close, second we are looking at 3 weeks from time offer was accepted to close date.