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Buying foreclosed homes
Posted on 1/28/10 at 7:24 am
Posted on 1/28/10 at 7:24 am
I know my way around rental properties, but do any of you have experience buying a house being foreclosed by a bank? I've called my real estate agent to see if we can go look at it. I know it's kind of trashed on the inside, but it's in a fantastic neighborhood and the outside is still in good shape. I want to see what the bank wants for the house, but I also want to know how flexible banks are about their asking price. TIA.
3
Posted on 1/28/10 at 9:48 am to notslim99
You can find out what is owed against the house at the courthouse. It is usually a more time consuming process but is worth it for the right deal. Good luck....
Posted on 1/28/10 at 10:34 am to notslim99
quote:
I know my way around rental properties, but do any of you have experience buying a house being foreclosed by a bank?
Here is what you do:
Go to the local branches and get a list of houses which are in 'pre-foreclosure' and by this I mean houses which are in the process of being foreclosed against the delinquent owner, but have yet been taken control by the bank.
Banks would rather NOT have a bunch of foreclosed property on their hands. The goal is to become friends at the local bank with the person who handles the mortgages and he can give you lists of houses which are close to being foreclosed.
This will allow you to approach the owner in an effort to bail him out by buying the house from him before he loses it to the bank. It's a win-win-win situation for him, the bank and yourself since the guy doesn't lose his house with zero to show for it, the bank doesn't have to handle the hassle of the foreclosure and subsequent sale of the house, and you can avoid the foreclosure auctions.
This post was edited on 1/28/10 at 10:36 am
Posted on 1/28/10 at 11:09 am to LSUAlum2001
quote:
LSUAlum2001
Thanks for that. My plan is to go to the bank that's foreclosing on the house to get the 411. I know a couple of mortgage brokers for major banks in town, so maybe they could give me some info as well.
Posted on 1/28/10 at 11:26 am to notslim99
if its a national bank good luck finding the person that handles the info for that house. Local is the key.
Posted on 1/28/10 at 12:35 pm to LSUAlum2001
-Not always the best idea. Someone in foreclosure usually has other liens, judgements, etc. Those attach to the property. You amy get the property but you will have to deal with the title.
If you let it go to sale, the bank will usually get it back, because most lenders will bid cost (what is owed) and no investors will bid it if it is not a really good deal. The best scenario is right after the sale, before it goes to the Real Estate Agent. Target the home you want, go to the sale, and see who gets it. Then you make your offer on it. Title will start fresh at that point, no liens or encumbrances. The bank will then release it to you to save costs.
If you do it before, you are asking for trouble.
If you let it go to sale, the bank will usually get it back, because most lenders will bid cost (what is owed) and no investors will bid it if it is not a really good deal. The best scenario is right after the sale, before it goes to the Real Estate Agent. Target the home you want, go to the sale, and see who gets it. Then you make your offer on it. Title will start fresh at that point, no liens or encumbrances. The bank will then release it to you to save costs.
If you do it before, you are asking for trouble.
Posted on 1/28/10 at 8:36 pm to LSUAlum2001
quote:How the heck is that a "win-win-win" if the mortgage is substantially underwater?
This will allow you to approach the owner in an effort to bail him out by buying the house from him before he loses it to the bank. It's a win-win-win situation for him, the bank and yourself
Posted on 1/28/10 at 9:23 pm to NC_Tigah
Inside info is the best. Someone with the bank. A real estate agent.
Sheriff sales don't allow you to view the inside. Banks will allow. A good agent will list a house, know the value and know if the people have to move fast/get out.
Flipping houses, money can be made, but you better do your homework. I've helped with a few. I would walk through a house, make a list of items with prices and see if money could be made.
Sheriff sales don't allow you to view the inside. Banks will allow. A good agent will list a house, know the value and know if the people have to move fast/get out.
Flipping houses, money can be made, but you better do your homework. I've helped with a few. I would walk through a house, make a list of items with prices and see if money could be made.
Posted on 1/29/10 at 2:58 pm to notslim99
I just bought my first house and it was a foreclosure in a awesome neighborhood! It took 2 months to close on the house.. it was very frustrating but in the end it was worth the wait. We got the house 30k cheaper than the identical homes in the neighborhood and there was maybe 200 to 300 of work needed to be done!
Posted on 1/29/10 at 9:08 pm to kevmeister2005
Best of luck Kev........ 
Posted on 1/30/10 at 8:55 am to LSUDad
We looked a lot of foreclosed homes in great and not so great neighborhoods. We found some that needed a lot of work and some that looked like they didn't. What we found was that the closer you look, sometimes they need more work than you think.
We eventually realized that if the owner was having trouble making mortgage payments, then they obviously didn't have the money to maintain the property. We found lots of issues that could have been prevented with proper maintenance.
We eventually realized that if the owner was having trouble making mortgage payments, then they obviously didn't have the money to maintain the property. We found lots of issues that could have been prevented with proper maintenance.
Posted on 1/30/10 at 11:26 am to seawolf06
quote:
We eventually realized that if the owner was having trouble making mortgage payments, then they obviously didn't have the money to maintain the property. We found lots of issues that could have been prevented with proper maintenance.
This also.
Many times you can walk around the house, check for cracks in the bricks (Wall Cracks). Inside may have Lights, Fans, Microwave, Doors, etc. missing.
Posted on 1/30/10 at 12:04 pm to LSUDad
quote:
check for cracks in the bricks (Wall Cracks)
This is important in any home. What we found was more along the lines of lack of paint and cleaning. This led to rotten siding and mold.
Posted on 1/30/10 at 3:38 pm to seawolf06
quote:
check for cracks in the bricks (Wall Cracks)
This is important in any home. What we found was more along the lines of lack of paint and cleaning. This led to rotten siding and mold.
Some will show a cracked slab.
Posted on 2/2/10 at 9:32 am to LSUDad
quote:I like those things. They're a ticket to discounting the property price. And, they discourage competition. Holes in the sheetrock are wonderful. These items are sooo cheap to fix. Elbow equity is a wonderful thing.
Inside may have Lights, Fans, Microwave, Doors, etc. missing.
But, as mentioned above, and as I tell everyone, "DO your homework." And, work is the key word there. He has to have a functional idea of the value of the properties he's viewing. And/or work with a professional who does. Also, be patient. Some of the guys who are very successful at this make 40 to 50 offers before one is accepted. Obviously, they are offering low numbers. Just as obviously, some are accepted.
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