Would you buy a foreclosed home?

[Liz CA]

Dh has pointed out some "good deals" because of foreclosures.

We are in transition due to job transfer. We are thinking of renting

first but there are some homes at incredibly low prices (for California anyways).

 

I feel like a vulture even considering it. I feel like I am taking advantage of another family's misfortune that could and would have been mine had we not found a job. It feels a little like stealing. It does not feel right.

 

Illogical? Yes, probably. We should buy if we can afford it to help rev up the economy? Yes, maybe. But it just feels so wrong...:glare:

[Barry Goldwater]

Dh has pointed out some "good deals" because of foreclosures.

We are in transition due to job transfer. We are thinking of renting

first but there are some homes at incredibly low prices (for California anyways).

 

I feel like a vulture even considering it. I feel like I am taking advantage of another family's misfortune that could and would have been mine had we not found a job. It feels a little like stealing. It does not feel right.

 

Illogical? Yes, probably. We should buy if we can afford it to help rev up the economy? Yes, maybe. But it just feels so wrong...:glare:

 

Yes, illogical (but good hearted)...prices were over-inflated, and the auction/foreclosed offer you make would be more like a true, honest, 'market value' price. That's not your fault.

 

BUT <CAUTION>

 

There are tons of issues regarding foreclosed properties not having clear titles, and I would be extra careful in getting lots of title insurance, and getting clear chain of custody on the property before buying...you might pay for 30 years on a property that the bank never really owned, and that you therefore can't rightfully own...do some homework on this topic for your own sake.

[elegantlion]

We did. Honestly, in our price range the majority of homes were foreclosures. We tend to buy as is, that's one thing to consider. Most of the time banks will not make any repairs and many times there are no disclosure forms, so make sure you get a good inspection.

[Trish]

If it's foreclosed, the previous family has already lost the home so, :confused:. Plus, you don't know why they lost it, maybe they were Tiny Tim's family, maybe they were house flippers, maybe it was an investment property, maybe someone who could afford to pay decided to walk away because it was underwater, there's no way to know. And it no longer affects whomever it was, anyway, so :confused:.

 

I'd be more concerned about the title issues mentioned above (make sure it isn't a MERS property), and whether the inside has mold or anything like that. Also, what's the neighborhood like -- normal, or lots of foreclosures all around?

 

The whole idea of "taking advantage," well every time you buy something Made In China, you're buying something made by someone who has a lower standard of living than we do (most likely), and we could ask ourselves, was it made by virtual slave labor? A prisoner? A child?

 

Etc.

[Paige]

We would if we found one we liked. I'd stick with ones being sold by realtors and bank owned with a clear title instead of ones being sold at auction. In our area, the houses were not overpriced for what they were, but rather the high foreclosures are due to an oversupply and speculative builders. You couldn't build a house for what they are selling for around here- even if the land was cheap, and our housing market was known nation wide for being quite reasonably priced even before the crash. When the easy money quit flowing, too many houses were unable to sell because no buyers could get mortgages. I actually saw a sign for a new development that said "half off sale!" :blink: Then, you combine the oversupply with people losing their jobs and being unable to sell their reasonably priced home because everyone else is out of work and the banks aren't approving anyone, you get a disaster. Seriously- you'd be doing the people a favor to get that foreclosure off the market. It's dragging everyone else down.

[mandymom]

We did, and I love it! I think that our house was an exception though. We found a three year old house in almost perfect condition (the stainless steel refrigerator was even included) in a highly sought-after neighborhood and it was an incredible deal.

 

The only problems that we ran into was that the bank that owned it was very slow in responding to anything. It took 10 days to find out if our offer was accepted and over 5 days after closing to actually get the keys (and the funding was there). These were minor things in hindsight, but seemed bigger at the time.

[4wildberrys]

I think the same way even looking at foreclosed homes! But like a pp said, you don't really know the story behind the house. But this is how I would go about it: I would not and could not buy a home that had a sad story behind it, like an elderly couple being cheated with ARM or something. That's just me though. Honestly, we lost a home to foreclosure in our small town because it just would NOT sell. The current owner bought it for over $100,000 less than what we paid for it---not to mention the improvements we put in. And---I know this sounds terrible---but every time I 'have' to drive by it, I hope he HATES living in that house :glare: Of course, then I say a quick prayer for my awful thoughts and remind myself it's NOT his fault :tongue_smilie:

 

But realistically, in CA I would say that buying a foreclosure for rock bottom pricing is really the only sane thing to do because housing is still inflated in many areas and needs to drop a LOT more.

[Luckymama]

We bought our current house that way! We had to jump some hoops and wait a bit longer because of the owning bank's requirements, but we saved over $100K :D This was in 2006 and our house was only one of two foreclosed upon that year.

[zookeeperof3]

We bought our house out of foreclosure. The reason the previous owner's were losing the house.....they had a horse in the back yard for their kids...across the street from town hall....next door to the mayor.:blink: They didn't think they'd get caught for violating the town ordinance. They were told to get rid of the horse. They chose to buy another house outside of the town limits.....and none of them can ride the horse, it was never "broken in". lol

 

It was a good deal for us, we'd do it again. Your taking a house off the market, thus freeing up the money so that someone else can get a loan for their dream house. Just do your homework and I'd only buy through a reputable agency or bank.

 

Good Luck.

Kim

[Plagefille]

We did about a year ago and we love our house. Also, it was the only way we could afford a house that was not really old. Just know ahead of time that many of he houses are TRASHED! But some were really good, just needs some love. The title is easy to check on if you are interested in a particular house.

Also, don't feel bad because at this point the old owners have already lost the house and it is best for everyone (gov, mortgage comp, neighborhood) for someone to buy and live in the house.

[tex-mex]

Yes, illogical (but good hearted)...prices were over-inflated, and the auction/foreclosed offer you make would be more like a true, honest, 'market value' price. That's not your fault.

 

BUT <CAUTION>

 

There are tons of issues regarding foreclosed properties not having clear titles, and I would be extra careful in getting lots of title insurance, and getting clear chain of custody on the property before buying...you might pay for 30 years on a property that the bank never really owned, and that you therefore can't rightfully own...do some homework on this topic for your own sake.

:iagree: Especially if the family were military. Lawsuits going on with that scenario and both BofA and Wells Fargo reimbursing those who were in the military and were foreclosed on.

[Truscifi]

We did, though it was 2003 and our house was one of 5 foreclosed on in our county that year. The house had been sitting empty for over a year, so we didn't feel like we were taking it from anyone, in fact we were helping the neighborhood because the bank hadn't been keeping up with things like lawn care. :glare:

 

I would do it again if I were looking to buy, but I would be much more careful because of the legal issues around recent foreclosures. And many foreclosures and even short sales have been totally trashed because the people moving out stripped everything they could sell and took it with them.

[Crimson Wife]

We looked at some, but they tended not to be in "move-in" condition and the banks were selling them "as is". We didn't want to deal with the hassle of major repairs so we passed.

 

There was a family on our block whose house was up for auction last week but they got a last-minute offer as a short sale. These folks were the original owners (the house was built in '88) so they ought to have gotten it mostly paid off. Instead, they did a cash-out refinance in '04 and spent at least part of it on a couple of Mercedes. They don't really speak English so I don't know their full story (they might have been dealing with unemployment or large medical bills or other unforeseen financial woes). But it's hard for me to feel huge amounts of sympathy for them given that it appears they treated their home as a piggy bank to finance a lavish lifestyle.

[Trivium Academy]

i would if I had the time to wheel and deal and possibly lose the bid for the house and look for another. I wouldn't if I didn't have the time or the funds to secure possible multiple contracts of homes in case one fell through. They are a crap shoot.

[Cedarmom]

I know some people don't think you should because it is taking advantage of someone's misfortune. But, when I drive by houses that are sitting empty and getting worn down for lack of care I think if it were my house I would feel better if my house had been bought by a family who would love and care for it rather than just sitting empty and falling apart.

[Laura Corin]

i would if I had the time to wheel and deal and possibly lose the bid for the house and look for another. I wouldn't if I didn't have the time or the funds to secure possible multiple contracts of homes in case one fell through. They are a crap shoot.

 

Long time no see! How are you?

 

Laura

[elegantlion]

a couple of other comments. 1. We ran into an issue where it seemed there were investors sitting in the realtors pockets. In two instances we made an offer on foreclosures. At the time we had been assured by our agent, in his discussion with the listing agent, that there were no offers on the house. We made our offer which magically came in at the same time as another. Then, of course, they want you to up your bid because of this other offer.

 

The house we are in now we backed out once and then the other offer fell through. Our agent was very proactive and has a low tolerance for games, helped us get the house again at a better price.

 

I am so glad we got our house, it was definitely the house for us. It was only going to appeal to certain buyers because it was foreclosed on mid-flip. There was no furnace, no bathroom sink or toilet, no workable kitchen, and half painted walls and half finished floors.

 

After a two month remodel it was done enough to move into. It's the house that was meant for us, we all love it. I think homes have an atmosphere and this home was lonely and now it's peaceful. As goofy as it sounds a house needs to be loved, I hate to imagine the condition of this home had it sat empty all winter.

[happypamama]

Ten years ago, we bought our first house, a foreclosure that needed a bunch of cosmetic work but which was generally structurally just fine. It turned out to be a great deal; we did most of the work ourselves and saved a ton, and it was a comfortable home for us and our first child and in a pleasant neighborhood/area. Every time you buy a home, you're taking advantage of something happening to someone else, whether that something was good or bad, none of which is under your control, and if the home is something that you can handle (ie price, whatever work it might need, etc.), then I vote for going for it!

 

I suggest having all houses inspected thoroughly before buying (and putting that contingency in your offer, so you are able to walk away if the inspection reveals more damage than you want), but especially a foreclosure, in case the previous owners were disgruntled and trashed the place. (I've heard of cement in the pipes and such.) It may also help to have an agent/lawyer who is familiar with foreclosures and who can help you deal with the selling bank as well.

[GoVanGogh]

I feel like a vulture even considering it. I feel like I am taking advantage of another family's misfortune that could and would have been mine had we not found a job. It feels a little like stealing. It does not feel right.

You are assuming, though, that they lost it because they were victims of the on-going economic issues.

The house next door to us is in foreclosure and just went on the market this past week. I won't go into all the details, but they had been struggling to stay in their house for the past 10 years and none of the reasons were because they were unfortunate.

Now I personally wouldn't buy this house because it had been used as a drug house for at least six months prior to the former homeowner skipping town in the middle of the night.

(Actually, I would consider buying the house to bulldoze it so I could expand my garden. :D)

[gingersmom]

There is no way I would.

 

There have been so many stories about banks foreclosing on homes that they did not even have title to.

 

There was a just a story in todays NY Times about a women who for 7 years has been fighting with Wells Fargo to show proof that they have title to her house and can foreclose on it. Two other banks also claim that they have title to the house. Crazy!

 

There was also an article several weeks back about a military family who was wrongfully foreclosed on while the husband was deployed and the house was sold at auction. They were never able to get their house back.

 

I would be way too worried.

Edited February 27, 2011 by gingersmom

[ChristineW]

Dh has pointed out some "good deals" because of foreclosures.

We are in transition due to job transfer. We are thinking of renting

first but there are some homes at incredibly low prices (for California anyways).

 

I feel like a vulture even considering it. I feel like I am taking advantage of another family's misfortune that could and would have been mine had we not found a job. It feels a little like stealing. It does not feel right.

 

Illogical? Yes, probably. We should buy if we can afford it to help rev up the economy? Yes, maybe. But it just feels so wrong...:glare:

 

Don't feel bad. I feel bad about some lowball offers that we've seen on houses around here. One house had been purchased for 975 in 2007, the owners spent 150k on remodeling and fixing the drainage. It sold for 779 after sitting on the market for more than a year. I cried when we lost the bid for that house--winning bid offered 50% cash down.

 

We just bought a fantastic home in a great neighborhood for 250k less than it was appraised for two years ago. The home had a reverse mortgage that had to be paid off this month and owner had no wiggle room. (We did offer 1k over asking price but the realtor messed up-three neighbors came by and yelled at the daughter for listing it so low). But that's the reality of the market right now. Only desperate people are selling. However, in a sane universe--even the prices of foreclosures here are too high.

 

If it makes you feel better about buying a foreclosed property, the bank doesn't have to write down the loss until it sells the property. So buying a foreclosed property makes the bank take a hit.

 

Christine

 

ps. we couldn't buy a foreclosed property because we've yet to see one that would pass an FHA inspection.

[TravelingChris]

I don't think I would but it wouldn't be because I don't want to move into someone unfortunate situation. It would be that when we move, we need a place fast and these foreclosures aren't fast and often can't pass inspection. Since we would be getting a VA loan, that just wouldn't do. We have always gotten our own title insurance when we bought a home (two times previously) and we certainly would be doing that now with all the messes of titling that has happened.

[Amy in NH]

We did. There was nothing suitable in our price-range (rather low), and we were able to get a really good deal on this house. It is perfect for our family in size, location, and acreage. However, it needs a ton of work and there's no history on it due to the foreclosure. The ppl who lost it to the bank pretty much stripped it, and we've been working on it for the past 3 years. It's livable, but needs a new roof (leaking/raining in 7+ places upstairs - buckets all over the attic), new foundation sills (which had been covered up by someone - not readily apparent during home inspection), and we have some well problems. But, I love it anyway. If these problems had been found during home inspection, we likely wouldn't have gotten the house... and I'd rather take the house with all it's problems than not.

[Liz CA]

You are assuming, though, that they lost it because they were victims of the on-going economic issues.

 

 

True. When I hear foreclosure I think unemployment, huge medical bills, disability, etc. But I even feel for those who made bad decisions because I have made wrong decisions in my life that I could identify in hind sight.

 

There is no way I would.

 

There have been so many stories about banks foreclosing on homes that they did not even have title to.

 

There was a just a story in todays NY Times about a women who for 7 years has been fighting with Wells Fargo to show proof that they have title to her house and can foreclose on it. Two other banks also claim that they have title to the house. Crazy!

 

There was also an article several weeks back about a military family who was wrongfully foreclosed on while the husband was deployed and the house was sold at auction. They were never able to get their house back.

 

I would be way too worried.

 

The military stories are horrific. While a spouse is off putting his life on the line, his/her family is being kicked out of their home. This is the kind of horror story that robs me of sleep at night.

[Liz CA]

I know some people don't think you should because it is taking advantage of someone's misfortune. But, when I drive by houses that are sitting empty and getting worn down for lack of care I think if it were my house I would feel better if my house had been bought by a family who would love and care for it rather than just sitting empty and falling apart.

 

Good way to look at it!

[lionfamily1999]

Don't forget how happy the neighbors will be to see the lawn cut and someone other than squatters staying in the house next door.

 

You aren't necessarily a vulture, you're a welcome sight to folks that have been staring at vacant property.

[Swirl]

I feel like a vulture even considering it. I feel like I am taking advantage of another family's misfortune that could and would have been mine had we not found a job. It feels a little like stealing. It does not feel right.

 

There's another side to the coin.

I have a very dear Christian friend that is a wonderful stay at home mom to three beautiful little children. Guess what they do for a living- they own two banks!

We often see "the bank" as this big, faceless, evil machine out to get the little guy. That's not always the case though. I know with my friend, this is her husband's job and where they have their own money invested. Owning houses is NOT healthy for a bank. You may feel bad about the owner that lost the house, but he is not the only person affected by a foreclosure. I'd buy one if the title were clear.

Edited February 28, 2011 by Swirl

[Crimson Wife]

But I even feel for those who made bad decisions because I have made wrong decisions in my life that I could identify in hind sight.

 

If a family bought a new Porsche when they knew (or should have known) that all they really could afford was a used Toyota and then 6 months down the line the car got repossessed, would you feel sorry for them?

 

Back during the height of the bubble we saw quite a few people whom we knew had a lower income than ours purchase expensive homes with exotic mortgages. They would non-chalantly talk about refinancing when the loan re-set or "flipping" the house. Well, here it is 5 years later and many of them are losing those homes to short sale or foreclosure.

 

Of course, there are plenty of responsible folks who are truly victims of the terrible economy and my heart goes out to them. But I'd say they are the minority in my area.

[Kari C in SC]

Yes,we have purchased two foreclosed homes. We bought the one we currently live in back in 2007. We also just purchased one across the street last week. With both homes, we got a pretty good deal. Of course they both need/needed work. They aren't usually move in ready. Somebody needs to buy them or they just fall apart and ruin the neighborhood. It may as well be you. We bought the one across the street as a rental property. When our oldest passed away this year, he left us life insurance. We decided to invest some of it in a house that hopefully one of our children will live in some day. Right now, we will just have renters pay the mortgage on it.