Buy a foreclosed home or not?

[ballmode]

Looking for homes, thinking of getting one. Tell me why I should or shouldn't.

 

[spidey07]

You should because of price, you shouldn't because they may have let it get run down so a very thorough inspection is needed.

 

[dabuddha]

What spidey07 said. I did and don't regret it one bit considering I paid almost 80k-100k below what it was appraised at.

 

[spidey07]

What spidey07 said. I did and don't regret it one bit considering I paid almost 80k-100k below what it was appraised at.

Don't you have to be REALLY careful at closing as well? Make sure the transfer and deed are free and clear without any legal hassles that could arise later on?

 

[ElFenix]

redemption laws suck

though i suppose it probably wouldn't be on the market unless there's no redemption period or it's close to the end.

 

[Vette73]

Our hosue was a forclosure.

It needed work but my wife is picky so no matter what we bought we would have to tear some of it out. That and I can fix pretty much anything so for us it was a win as the house was also on a big lot for N.VA (over 1/2 acre) and very close to the metro.

 

[Pantoot]

Don't you have to be REALLY careful at closing as well? Make sure the transfer and deed are free and clear without any legal hassles that could arise later on?

Not really, the title company will take care of that, and the title insurance will cover you in case there is anything shady hiding in the mist.

 

[classy]

You should because of price, you shouldn't because they may have let it get run down so a very thorough inspection is needed.

100% correct

 

[Squisher]

You should because it'll give an excuse to buy all kinds of new tools.

:sneaky:

 

[classy]

Not really, the title company will take care of that, and the title insurance will cover you in case there is anything shady hiding in the mist.

Actually thats not true. Many people make that mistake. Title insurance protects the mortage company, not you. If someone comes along and makes a claim for the house, the title insurance will try pay the person off most likely. If the persons claim is legal and they want the house awarded to them probably in court, the title company will then pay the mortage holder (bank) protecting them against loss. But you are out, you lose the house, any down payment money, just about everything. There is additional insurance available for the borrower you can get to protect against this. Most title searches are pretty damn thorough and any clouds are taken care of. But title insurance protects the bank or mortage lender, not the borrower.

 

[dandruff]

also title insurance covers the purchase price .. and not what you put into it to fix it up or market value ... fyi - bought 16 last year ... (as an investor) ...

 

[luv2liv]

where do i even find forclosure listings??

when i do a search, it seems i gotta join a shady club...for a monthly fee, they will send out a list. is that how it works?

what about all those bank seized houses. how and where do i find those deals where the banks want to liquidate?

 

[Corporate Thug]

where do i even find forclosure listings??

when i do a search, it seems i gotta join a shady club...for a monthly fee, they will send out a list. is that how it works?

what about all those bank seized houses. how and where do i find those deals where the banks want to liquidate?

real estate agents have access to them.

 

[Ms. DICKINSON]

What is good? Going for foreclosed properties or short sales properties?

 

[a123456]

where do i even find forclosure listings??

when i do a search, it seems i gotta join a shady club...for a monthly fee, they will send out a list. is that how it works?

what about all those bank seized houses. how and where do i find those deals where the banks want to liquidate?

Totally depends on the area and what kind of foreclosures you're going for.

For short sales and being safer along with REOs, you probably want to just go through an agent. They'll help you do some research and fill out the paperwork.

If you're looking to go and buy the property on your own, depending on the state, the property is typically sold at the courthouse. Wander down there and ask the auctioneer for the listing company's web site, if they have one. If they do, they should have the listings for their company. Repeat for each auctioneer.

Just beware that these types of sales you have to do solid research on because they are typically sold as-is, so if you miss some liens, you're stuck.

As far as which type of sale to pursue, both kinds have tons of good and bad deals. Only difference is that short sales take a lot longer to complete and the bank will check you out, etc. Courthouse, you have to pay all cash up front, which is fine for investors but many normal people might not be able to afford that. Buy what fits your needs and price point.

 

[mizzou]

be careful

foreclosure is nasty and it rarely happens in a beautiful place in a beautiful neighborhood

 

[ballmode]

I would think that a foreclosed home would bring down the value of the neighborhood and it would take years possibly even decades if at all to recover the value.

 

[KillerCharlie]

Bank owned or foreclosures are almost always fine. I disagree with some of the people above. From what I've seen, the nicer the area the more foreclosures.

Definitely stay away from short sales though.

 

[sandorski]

As long as it's not yours.

 

[a123456]

There are tons of foreclosures in all areas, including nice areas like Beverly Hills and Manhattan, etc. Economy died so tons of incomes went down and lots of people couldn't afford it anymore.

Compared to regular sales, the major "downside" is that the bank owned stuff generally is in worse condition than regular sales. But it's not always the case. It's just that when a bank owns something, they're lazy and don't care to fix it up and they take forever to sell it. So your cost to fix it up might be higher, but you're generally buying it at a lower price.

I wouldn't be surprised if foreclosures tend to be crappier than normal sales, but think of it this way. If you're buying to live, you only need 1 house. So just filter out all the crap in the areas you don't like and search for the areas that you do like. Even if there are 1000s houses in crappy areas, you only need 1 to be a good fit for you to make it work.

Regarding home values, yeah, Detroit lost more value than Manhattan, but if you're buying below market on these depressed prices, then it doesn't matter as much. So, if the house used to be worth 200k, and you buy it for 100k now, it's not that big a deal unless it goes down to 50k. Just don't buy something because it's "cheap" compared to the price at its peak. Still make sure it's good value.

 

[nerp]

Don't you have to be REALLY careful at closing as well? Make sure the transfer and deed are free and clear without any legal hassles that could arise later on?

That's what a title lawyer is for.

 

[AyashiKaibutsu]

Only if you enjoy feeding off the blood and sweat of another (I kid sounds like a good idea).

 

[Modular]

be careful

foreclosure is nasty and it rarely happens in a beautiful place in a beautiful neighborhood

In typical times this is true. These days not so much.

 

[EagleKeeper]

Short sales can take a lot of time - the bank that controls the papers, once some interest is shown, may want to hold off to see if better offers are potentially coming down the pike.

 

[Gibson486]

yeah, when i was looking at condos the Realtor told me that it was not foreclosures that take alot of time, it's short sales.