Buying Foreclosed Homes

[jamarcus]

Hi all,

I was reading the following article http://www.thehelpster.com/2008/10/2...reclosed-home/ on buying foreclosed homes and I was looking for some advice. I feel that the article gives some pretty good tips, however, I wanted to know if anyone had any real life experience in buying a foreclosed home. There are a ton of foreclosures happening around me and I want to see if this is something I should look into. Please help.

[angela_rey]

this doesn't seem like a site I would visit it requires to much information. are you really looking for informaiton or just promoting this blog?

[First Time Home Buyers]

My wife and I bought our first home this year -- it was a Foreclosure.

Not a horrible one, but did need some work and updating to make it nice.

I have also helped 2 other First Time Home Buyers buy Foreclosures this year. Again, it may take more looking, but there are good ones out there. Plus, they are CHEAP!

[AndrewH]

I've read a whole bunch of articles that say buying foreclosures are risky. They said its like opening a box without knowing whats in it. Is it really that risky? When searching through foreclosures are agents the best medium?

[Madtown RM]

My clients are closing on a bank-owned property in about a week. Is this the same as a foreclosure or does there have to be an auction for it to constitute a foreclosure? I understand that in an auction situation you could be assuming all the liens and unpaid back taxes so you'd better do your homework before you bid. With a bank-owned property, on the other hand, the biggest risk is probably not knowing what you're getting into unless you have a very thorough inspection. Also, the properties are often winterized and it can be a real bear to get approvals in time to get the property de-winterized so that all the utilities can be turned back on for the inspection. Further complicating matters is when something is not operating correctly (like the furnace, which is the case with the deal I'm currently working on) because then you've got to get someone to diagnose it, quote a repair and then get the bank to approve the repair - all before you've ever finished your inspection! And good luck getting an extension from a bank if you need one. Your best bet is to work with a very aggressive Realtor who is hungry for your business and will do whatever it takes to get the job done.

[Dallas Broker]

finding a good deal and buying a foreclosure is not the problem in this market, it's selling the property once you've secured. best strategy in this type of economy is to build a rental portfolio and sell down the line once the seller market returns.

[Madtown RM]

Isn't that part of how we got into this trouble in the first place?

[AZAgent2]

I think buying a foreclosure home is the best way for buyers to get a deal in this market. In Tucson foreclosure homes seem to be 1/2 of the market and there is a ton of competition between the banks to offload their inventories. SO it all adds up as a good situation for buyer. (Not so good for sellers unfortunately)
The key to a foreclosure purchase is to have very good due diligence completed by your agent, inspectors, title company etc. As a buyer don’t be scared to spend some money getting good highly qualified inspectors and specialized inspectors for items you believe need additional investigation IE: mold, plumbing, and/or electrical. If everything checks out look to save 10%-15% vs. what that exact same home would sell for it if it wasn't a foreclosure. (Although to be prepared to put about 5% of the purchase price back into the home in repairs as most foreclosures need "TLC" on a good day and a whole lot more on others..)

[mrbrian]

Most people are either not willing to do the work to make a foreclosure liveable or they do not have the extra money and skills to make the property liveable.

The deals are out there. But due dilligence like AZAgent2 suggested is a must. I bought a foreclosure but looked for 6 months before finding one that was worth buying.

[JennSellsFast]

Foreclosures are tricky. I you have the time and patience to negotiate with the bank, you could land a good deal. Many of my clients have withdrawn offers from many bank owned listings due to the very slow negotiation process. I had one client wait 65 days for a counter offer. Ouch!