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Posted: 2/24/2009 11:31:29 PM EDT
The gears in my head are slowly turning.  And I very well may be wrong.  

A lot of people are losing their homes due to foreclosures right now, right?  And the banks can't possibly want to sit on them - right?  I hear all the time about the "foreclosed homes selling for pennies on the dollar!" or the "best time for wealth building in recent history!" and it has certainly caught my attention.

I'm getting married in August.  Skipping a rent payment would be excellent, considering it's basically burning money because you gain nothing from it.  The way I figured it, if we could capture a foreclosed home for a good enough deal - why not?  But through my Googling (which, I will be the first to admit, has been very lackluster today for some reason) I have turned up nothing.  What's the deal with that?  Where do I start to look?
Link Posted: 2/24/2009 11:36:31 PM EDT
[#1]
When I was looking for a house, I looked at a few foreclosures. While they were significantly cheaper than similar sized houses in the same area, they were all run down pieces of shit (including the ones in nice neighborhoods). I quickly learned that you were getting what you paid for with foreclosed homes. Remodeling one of those houses would have cost more than the amount I would have saved.
Link Posted: 2/24/2009 11:40:39 PM EDT
[#2]
what he said.

plus, I hear it's hard to get a loan anyway. I, like many others here, am glad I got a home I could easily afford.
Link Posted: 2/24/2009 11:58:13 PM EDT
[#3]
Almost all are in disrepair for months while occupied and going through the foreclosure process.  Roof problems will create more major problems in short order, and so on.  For some reason the banks had rather sit on them rather than negotiate down from their listing price.  This may be different is some areas of the country.  I think catching them on the court house steps auction might work better, but ask a real estate atty.  There will still most likely be at least a few thousand in repairs.
Link Posted: 2/25/2009 12:12:53 AM EDT
[#4]
https://va.reotrans.com/index.cfm?

Even if you are not a veteran you can buy these. Cheapest house in Kansas thru them is $8900.
Link Posted: 2/25/2009 12:14:19 AM EDT
[#5]
the banks are sitting on them because they are greedy and not willing to admit they fucked up , they don't want to take a big loss . They SLOWLY bring houses onto the market as needed , to again ,ARTIFICIALLY keep the housing prices as high as possible . They have learned nothing and are doomed to fail . The bailouts only hold off the inevitable . The prices haven't crashed completely yet because the pussy's are throwing a tantrum  people will no longer buy a 60k dollar home for 250k .

A friend of mine remarked art what a steal 110k seemed for a house here in AZ . I gently reminded him he was getting a cookie cutter / pressboard / shack on a 1/4 acre of fucking DESERT !!!!   I guess there are still some fucking idiots left over after all of this   Thank god they can't get loans .
Link Posted: 2/25/2009 1:07:13 AM EDT
[#6]
Quoted:
the banks are sitting on them because they are greedy and not willing to admit they fucked up , they don't want to take a big loss . They SLOWLY bring houses onto the market as needed , to again ,ARTIFICIALLY keep the housing prices as high as possible . They have learned nothing and are doomed to fail . The bailouts only hold off the inevitable . The prices haven't crashed completely yet because the pussy's are throwing a tantrum  people will no longer buy a 60k dollar home for 250k .

A friend of mine remarked art what a steal 110k seemed for a house here in AZ . I gently reminded him he was getting a cookie cutter / pressboard / shack on a 1/4 acre of fucking DESERT !!!!   I guess there are still some fucking idiots left over after all of this   Thank god they can't get loans .


YES, you're right about the banks sitting tight...they want the bail out bucks and they'll sell the foreclosed properties when market prices return to higher levels...

The same bad loans are going to be resold and the associated properties as well–– When the banks holding the loans are paid off and the demand for more homes increases.

I look at it this way; there's a contract worth X $$. Either the borrower is going to pay the bank or the Kenyan is going to pay the bank and right now, it's looking like the Kenyan. Meanwhile, the original borrower may still be on the hook for the note...foreclosure and bankruptcy will resolve the borrowers obligation to the bank but the bank/lender has title to the foreclosed property and will sell it as close as possible to the original principle amount of the note even though they've been 'bailed out' of their financial difficulties with tax payers $$...they want both. GREED. Let 'em fail. Fuck em'. No bank bail outs.

Personally, we've pulled out as much extra cash as we can afford to keep out of their hands. We pay the bills and leave them no extra. We're investigating several local credit unions...
Link Posted: 2/25/2009 2:34:18 AM EDT
[#7]
Remember, foreclosed properties are on the market for the same reason as repo-ed vehicles.

I doubt many of them have been taken care of.

Buyer beware.
Link Posted: 2/25/2009 2:41:22 AM EDT
[#8]
Quoted:
what he said.

plus, I hear it's hard to get a loan anyway. I, like many others here, am glad I got a home I could easily afford.


It is easy to get a loan.  You just need 20% and 700.  

The way it should be if someone is going to give you 100k+.

Link Posted: 2/25/2009 3:07:25 AM EDT
[#9]
Mortgage lenders are buying their own foreclosed houses back at auctions so that they don't have to claim losses and it keeps housing values a little higher.  If it doesn't turn around soon (and it won't), there's going to be a domino effect and housing values will go to crap when they can no longer afford to bankroll their own mess.  I wish I wasn't tied to a house note and all the maintenance/ancillary costs that goes with a home right now - its an easy 20% above your note just for maintenance when you look at the real dollars spent.  If the OP is renting reasonably, keep renting until housing values finish their cycle.  You've got the ultimate mobility now if you lose a job and need to relocate.
Link Posted: 2/25/2009 3:43:05 AM EDT
[#10]
If you're good with your hands and willing to do the work, a foreclosed house in a nice neighborhood could be a great oppertunity.

Kharn
Link Posted: 2/25/2009 3:52:30 AM EDT
[#11]
Kind of a PIA.

Easier to find someone selling something worth a shit and knows how to price to move.

Most banks don't even know whats in inventory.
Link Posted: 2/25/2009 3:59:16 AM EDT
[#12]
It is NOT hard to get a loan right now, if you deserve to get a loan (i.e. are credit worthy)
Link Posted: 2/25/2009 3:59:20 AM EDT
[#13]
Link Posted: 2/25/2009 4:00:28 AM EDT
[#14]
Aroudn here, true forclosures are sold by the sheriff at auction.  Every county has a link somewhere to the properties.

The danger is you by them sight un-seen, and generally they will need a lot of work that is unknown before you take posession.  Manyu have been left empty and now things such as furnaces,fixtures....wiring have been removed by scrappers, so you really have to be willing to work and have cash on hand for those type of things.

The better deal for someone in your situation is either talk to the bank, or network around town and try to find somebody who is close to forclosure and work out a deal to take over their loan from the bank and tank posession of the house.  Depending on the market, you may be able to negotiate a cheaper price with the bank due to current circumstances, save the current resident some eviction troubles, and save the bank a ton of legal fees.  There are a lot of deals to be had right now if you hunt hard enough.  Also by negotiating a distressed loan before it forclosures you can take some time to see the property and address its current state.

Dan
Link Posted: 2/25/2009 4:09:37 AM EDT
[#15]
There is no big difference between foreclosed home prices and regular market prices right now.  The regular market has dropped in order to compete with foreclosure prices.
Link Posted: 2/25/2009 4:11:02 AM EDT
[#16]
Link Posted: 2/25/2009 4:14:06 AM EDT
[#17]
Because home sales have fallen, some banks are not putting all of their foreclosures out there right now.

Link Posted: 2/25/2009 4:28:33 AM EDT
[#18]
Quoted:
There is no big difference between foreclosed home prices and regular market prices right now.  The regular market has dropped in order to compete with foreclosure prices.


This, some areas are touching the < $100 a square foot price.
Link Posted: 2/25/2009 4:30:48 AM EDT
[#19]
Some states, such as Florida, have what's called a lien theory on foreclosures. In FL,all foreclosed homes have to go to auction and all the proceeds, up to the value of the house go tothe bank to compensate them. Auctions are probably the best place to find such a home, especially if its not being sought by many other people.
Link Posted: 2/25/2009 4:53:58 AM EDT
[#20]
There are three ways to buy a "foreclosure":
1) before the auction. This is where you find someone in trouble and take it off of their hands. The problem is that they're probably upside down. You can do OK if you're able to work out a deal with the bank to take less than the loan balance (this is called a "short sale"). The problem is that there might be multiple loans and liens and it gets complicated to get everyone on board.
2) at the auction. Usually this is sight unseen, no inspection, no termite report, no contingencies. You'll need a substantial cash deposit and should have the rest of your financing lined up in advance. Also, you may be competing with a representative from the bank who is bidding based on some loan insurance formula. Prices at auction can be good or they can be crazy high.
3) after the auction. The bank, or hud, or whoever clears out most of the trash and feces from the house and puts it up for sale. You get to look at it, get inspections, etc. just like a regular house for sale. The big difference is that you'll probably need to bring a flashlight. The condition will be worse than a regular house for sale. A really nice one "only" needs every room painted and carpeted. You might also need to fix a broken window or two, a kicked in door, etc. Consider, though, that you might want to repaint and carpet almost anything you buy.

If you or your spouse is a LEO, EMT, teacher, or firefighter, please PLEASE check out the HUD "good neighbor next door" program. Short summary: if you stay in the house a few years, you get it 50% off. Your agent probably won't push this, because it's more of a PITA and doesn't help them any.
Link Posted: 2/25/2009 4:58:50 AM EDT
[#21]
You have a lot of legwork to do. My old coworker just bought a foreclosure at auction. He would go to the courthouse for awhile and just dig up as much info as possible. You want to look for liens, pending tax payments, all that kind of shit. Got a good deal too, a "$800,000" house for $450,000
Link Posted: 2/25/2009 7:42:21 AM EDT
[#22]
Quoted:
Aroudn here, true forclosures are sold by the sheriff at auction.  Every county has a link somewhere to the properties.

The danger is you by them sight un-seen, and generally they will need a lot of work that is unknown before you take posession.  Manyu have been left empty and now things such as furnaces,fixtures....wiring have been removed by scrappers, so you really have to be willing to work and have cash on hand for those type of things.

The better deal for someone in your situation is either talk to the bank, or network around town and try to find somebody who is close to forclosure and work out a deal to take over their loan from the bank and tank posession of the house.  Depending on the market, you may be able to negotiate a cheaper price with the bank due to current circumstances, save the current resident some eviction troubles, and save the bank a ton of legal fees.  There are a lot of deals to be had right now if you hunt hard enough.  Also by negotiating a distressed loan before it forclosures you can take some time to see the property and address its current state.

Dan


Sheriff/Court House foreclosures by law have to be published in a public place, typically either the local newspaper or a legal journal to fulfill that requirement. If they're published in a legal journal, it's typically circulated only through the business and legal communities. If you can obtain the listings, you can preview the foreclosures with a drive by.

Trust me on this one, there are folks hanging out with a brief case full of bank checks and letters of credit just waiting for choice properties...one man I used to work with was hired by a law firm to do nothing but preview foreclosures and bid or deal on them. Lots of foreclosed properties, especially those in great neighborhoods or money making multi-family units and commercial properties are bought before they ever reach auction.

Another approach is to ask around in your local real estate community and find a broker who specializes in foreclosure listings. Government owned foreclosures offered for sale, HUD homes, can be viewed on the HUD website. The listing brokers WERE doing hundreds of transactions. My sister just bought a condo unit well below 'market' appraisal and was bidding against only one other person.

It's a bit of a learning curve but press forward. Good luck.
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