Liz CA Posted March 10, 2015 Share Posted March 10, 2015 Tell me about it. I've read some threads / comments here (if you can link, great) that suggested it was a PITA to even think about buying foreclosures. Dh and I are contemplating a move and preliminary glimpses at the real estate sites showed a lot of foreclosures which are usually prices below comparable properties. So - what is the good, the bad and the ugly? If there are any real estate agents here, please chime in...or anyone who bought a formerly foreclosed house. Quote Link to comment Share on other sites More sharing options...
plansrme Posted March 10, 2015 Share Posted March 10, 2015 My husband and I bought a home through a short sale a couple of years ago. it was in our neighborhood and way underpriced. We figured we could flip it relatively easily. We did okay on it, and it actually was a fun project. If you are looking for a house to live in, though, you need to not have a deadline. Our offer (the only one on the table) sat in front of the lender for months and months and months, and then they accepted it and gave us something like a week to close. If we'd been trying to figure out how to get out of a lease or sell another house, that would have been an impossible timeline. We did end up getting a great deal on the house. Because it was a short sale rather than a foreclosure, the sellers had an incentive to not trash the place. We looked at some foreclosures that were trashed--it was depressing. Lenders have probably cleared out some of their inventory by now, so your experience may more efficient. Good luck! Quote Link to comment Share on other sites More sharing options...
Rachel Posted March 10, 2015 Share Posted March 10, 2015 We bought a foreclosure but the bank already repossessed it and it had sat empty for two years before we purchased it. The house itself was in ok shape, the previous people had taken light fixtures and towel rods, nothing major. The bank hired someone to replace lights, they installed cheap ones where ceiling fans had once been so you have to turn on two switches to get all the light bulbs to come on. We didn't notice the toilet paper holders were missing right away. Our home inspector said he was shocked it was a foreclosure because he rarely saw a foreclosure in such good shape. The actual negotiation and closing were more like a business deal. It went very smoothly. Quote Link to comment Share on other sites More sharing options...
Rachel Posted March 10, 2015 Share Posted March 10, 2015 One more thing. Buying a foreclosure allowed us to move into a neighborhood we couldn't otherwise afford. We've lived in our house just over two years and the value is now significantly higher than our purchase price. Quote Link to comment Share on other sites More sharing options...
Kari C in SC Posted March 10, 2015 Share Posted March 10, 2015 We have bought 7 foreclosures or shortsales as rental properties and 1 foreclosure that is our primary house. They have been anywhere from move in ready to needing tons of remodeling. I think as long as you go in with your eyes wide open knowing that they are sold as is, it is not a bad situation. We would walk through and take note of all repairs or upgrades that would need to be made. Then you have to decide if you can do it or are willing to pay somebody. You can also hire an inspector. You cannot use that to negotiate price, but you have it for you to decide what you want to get into. I can't say that anything really surprised us. We had to replace several hvac units because it is common that they are removed. Other than that, just typical upgrades, flooring, paint, appliances, etc. I am very glad we did this. We purchased 7 homes from 2011 to 2014 and they all have decent equity because bought them low and did most of the repairs ourselves. 2 Quote Link to comment Share on other sites More sharing options...
Liz CA Posted March 10, 2015 Author Share Posted March 10, 2015 We do not need to sell anything before we buy. I am not really thinking of auctions but those foreclosures that are advertised through agents. Do we need an agent to buy a foreclosure or would the selling agent suffice? I don't like the high pressure tactics of some agents and dealing with just one would be nice. :) Whatever we buy would become our primary residence. It's been (obviously) decades since we bought anything through a real estate agent. Last property was a for sale by owner and it worked out fine with the help of an attorney. Quote Link to comment Share on other sites More sharing options...
YaelAldrich Posted March 10, 2015 Share Posted March 10, 2015 I called about a foreclosure in MA today and the Realtor told me that with the owner living in the home, it was sure to be a major PITA. meaning legal action and eviction was sure to follow. I liked the low price and we had several months in which to rehab the house but getting lawyers to evict angry people - nuh uh. :leaving: Good luck! Quote Link to comment Share on other sites More sharing options...
Kari C in SC Posted March 10, 2015 Share Posted March 10, 2015 I would get your own buyers agent. You would need an agent that is okay with the red tape of foreclosures and shortsales. We have bought bank owned, VA owned and HUD. They all have different offer paperwork requirements. It is best to have an agent that knows their way around that. And a sellers agent is working for the seller. They will not always negotiate the best for you. 1 Quote Link to comment Share on other sites More sharing options...
TammyS Posted March 10, 2015 Share Posted March 10, 2015 We tried to buy a foreclosure a few years ago. In our area, basically one agent "gets" all of the foreclosures and he won't deal with anyone buy cash buyers. I mean, he won't return your phone calls, or your realtors phone calls or anything. It was very disappointing to us, because there were a number of houses that we would have loved, and could have afforded, even with the repairs that were needed...but we weren't cash buyers so we couldn't get anywhere. I'll always be a little heartbroken over a great house in a great little town that we loved that was listed for $90K, and we would have paid the full price (it would have been worth twice that restored), but we literally couldn't get a foot in the door. They later sold it to a landlord for $65K, who then broke it into apartments. Sad. 1 Quote Link to comment Share on other sites More sharing options...
PeachyDoodle Posted March 10, 2015 Share Posted March 10, 2015 The first home we owned was a foreclosure. You definitely want to have a good home inspector, who can verify the status of the major systems in the house. We steered clear of anything with any structural issues and looked for a home that needed cosmetic work only. Location is a big deal, of course. Our house was pretty well trashed inside. We were able to buy it on the cheap and take out a line of credit on the instant equity to remodel. (We were in our early 20's and had no cash!) We put about $10,000 into paint, flooring, and a few other (mostly minor) repairs. When we sold about 5 years later, we made a nice little profit. HUD homes typically open for bids by owner-occupants a couple of weeks early. So you can get in on the best ones ahead of the investors if you're planning to live there for a certain number of years. You definitely want a buyer's agent -- preferably one who specializes in foreclosures -- especially if you're looking to buy in an area you're unfamiliar with. Dealing with a foreclosure can be a different beast. There are lots of hoops to jump through -- especially if you're dealing with the government. IIRC, there are certain bid systems that only an agent can access. Good luck! 2 Quote Link to comment Share on other sites More sharing options...
sbgrace Posted March 11, 2015 Share Posted March 11, 2015 We bought a foreclosed home via sheriff sale at auction. This meant it was sight unseen, though the former owners were neighbors of my parents and were helpful and accurate with information. We knew there were no water issues, which would have been the only deterrent for me. We had to replace nearly everything in the home (entire kitchen replacement, flooring new, skim coat walls, replace heat/air and hot water heater, relocate and change basement stairs, etc.) We were expecting this, and I was glad to be able to make this home what I wanted it to be. 1 Quote Link to comment Share on other sites More sharing options...
Liz CA Posted March 11, 2015 Author Share Posted March 11, 2015 Thank you all for your very helpful suggestions! Quote Link to comment Share on other sites More sharing options...
Anne in CA Posted March 11, 2015 Share Posted March 11, 2015 We have a friend who is wanting to move to Nevada. Every foreclosure he has looked at has been trashed beyond repair. I would be extremely careful. Quote Link to comment Share on other sites More sharing options...
TranquilMind Posted March 11, 2015 Share Posted March 11, 2015 We do not need to sell anything before we buy. I am not really thinking of auctions but those foreclosures that are advertised through agents. Do we need an agent to buy a foreclosure or would the selling agent suffice? I don't like the high pressure tactics of some agents and dealing with just one would be nice. :) Whatever we buy would become our primary residence. It's been (obviously) decades since we bought anything through a real estate agent. Last property was a for sale by owner and it worked out fine with the help of an attorney. Most of the REOs have agents through which you have to submit an offer. Sometimes they come to auction. I've bought several properties at auction, though none were foreclosures, but rather elderly people who didn't want to or could not renovate enough to sell. I prefer private purchases too. It's really an easy process if you know what you are doing, and you should always have a real estate attorney review your documents anyway, not a Realtor. Quote Link to comment Share on other sites More sharing options...
shawthorne44 Posted March 11, 2015 Share Posted March 11, 2015 I've bought 2 HUD houses that had reached the "open bids daily from anyone stage". At that point, there is a minimum price they accept. Below that, they throw out your bid. Above that they accept the highest offer that day. I got an incredible deal on both. Only a limited number of agents can submit HUD bids, and they can tell you the formula. The first was because it needed a new roof, and to get a mortgage you had to put the price of the roof in escrow. I'd planned on putting more than min. down, so that wasn't a problem for me. But it did limit the pool of buyers. I bought that in 1997 for its new 1976 price. The second was recently. It had "structural" damage of a broken beam on a pier-and-beam house. The structural damage was repairable by any handy homeowner with 3 car jacks and basic tools. But, it meant no one could get any sort of mortgage. Which hugely limited the pool of buyers. Between a small inheritance from my grandmother and all our liquid assets we were able to pay cash ~42K. We have an acre and insurance recently said the house was valued at 166K, which I think is high. One thing you can say for HUD houses, is that there isn't any drama. It is a business transaction. No chance of the seller changing their mind, etc. Personally, I think you have to inspect the house yourself. There are books out there on how to do it. Get in the attic and look for water damage. Use a screwdriver looking for damaged wood. ... eta: fixed typo 2 Quote Link to comment Share on other sites More sharing options...
Liz CA Posted March 16, 2015 Author Share Posted March 16, 2015 Can anyone harzard a guess why Zillow wants you to open some sort of account in order to view the details on foreclosure properties while you can view details on regular sales without an "account?" I am always leary of opening another anything since I am just at the looking stage. Quote Link to comment Share on other sites More sharing options...
Liz CA Posted March 16, 2015 Author Share Posted March 16, 2015 :bigear: Quote Link to comment Share on other sites More sharing options...
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