Forclosed Houses

[Dozer]

My wife and I are looking at buying our first home. Today we looked at one that had been foreclosed on. It was build in 05 and foreclosed on in 05! What are some of the things a guy needs to look at on a foreclosed house or any house in general? Thanks in advance for any advice guys!

[fisherdog19]

Just make sure it is a home that fits your needs, and that you like. Most think that a deal is available on a foreclosed home, but most likely the mortgage holder will want the full market value of the home, especially if it is relatively new. Just keep at it, you will find something you like; Don't Settle!!!

[bassNspear]

a great deal always isnt a great deal if its not the right fit

[Dozer]

We really were not looking for forclosed houses but this one came along. It pretty much is exacly what we are looking for. Only thing im really nervous about it is what the yard looks like under the snow. Its all weeds now and doesnt look like there was ever any grass planted. When I lived in Alex we did a job for a woman that bought a house in the winter and was told there was a lawn and gravel driveway under the snow only to find in the spring there was no lawn, no topsoil and needed 4wd to get down the driveway!

BTW: Thanks fisherdog for your advice and help (I sent you an email last week with some questions, Im Brian)

[PerchJerker]

The seller has to disclose things like that. If it's not already in the disclosure documents, have it specifically addressed and put in writing.

Also, require an inspection of the house. You may have to pay for it yourself but it is the best way to go.

Assuming the yard is not in, in your offer you can always ask for the seller to pay some money toward sod and installation, etc. Given the selling market today, as a buyer you can and should make some reasonable requests for the seller to provide some concessions like that.

Hopefully you have a real estate agent helping you who is good and is experienced, it can make a HUGE difference in how well your purchase goes and even in how much you spend and what you get from the seller. I have always been annoyed when I've been involved in a transaction with an inexperienced agent, it usually makes the process much more difficult.

[MIKE IN lINO III]

I wouldn't be too worried about the lawn, I would worry about the condition of the house. I heard if a house sits unused it is hard on it. Water pipes.... where they drained or was the heat on over the winter? I would ask the same question about the appliances. Are they ALL in good working condition? Get that in writing also.

Mike

[Lip_Ripper Guy]

More than likely it is a bank owned home. They are not required to disclose anything to potential buyers, and you will have several forms waiving any potential liability on their behalf.

ALWAYS hire your own inspector and make the purchase agreement contingent upon their inspection. It costs about $3-400 on an average house, but they will give you a detailed report when they are done, with pictures and documentation for you to keep. If they find one problem with the house, you just covered your cost of the inspection. If there are any issues, they will walk you through the house and tell you if they are big or small, and you can make your own decisions from there.

I would also recommend that you always hire a competent real estate agent prior to looking at any houses. A good one will save you time, money and frustration.

[sparcebag]

Great deals on forclosed now. Did you see on the news last night a couple who bought, $126,000.00 under listed price.

[18 inch Crappie]

Make the seller pay for the yard and grass. put it in the offer or tell them it is going to cost X amount and get that amount off the selling price to make up for it. Also check out the area and make sure there are not more foreclosed homes close to yours. Other wise you might have renters and them other foreclosed homes can drive your value down also. Something to think about.

[huntingislife]

We just bought a foreclosed home a little over a month ago. We paid $80k under the asking price. Definetly need to get it inspected by your own inspector. It is especially helpful as a first time home buyer becasue they go through everything with you and get you up to speed.

[Dozer]

Yes it is a bank owned home and yes the pipes have been winterized and the heat is off. I dont think you are going to get a bank to agree to pay to redo the lawn, also as far as I know they dont have to disclose anything or guarantee anything. Anouther thing I forgot, there are no appliances or C/A unit. Our realtor thinks they probly sold them before they moved out. Our realtor doesnt seen to optomistic they will come down alot on the price but I thought we should offer about 75% of asking price since its been around so long. How much is actual value under county appraised value? County appraised it $210000.

[papabear]

Ive heard rumors of house auctions where houses are going for cost, aprox 50-100,000 on houses that used to cost 150-300,000. Any truth to rumor.

[Lip_Ripper Guy]

County assessed value is a crapshoot at best. I've looked at about 50 houses today on MLS, and most houses are selling for 5-10% under county value. It will be interesting to see what happens to those values. They are quick to raise them if you sell for more than their amount, but I wonder how quick they will be to bring them back down?

Highly unlikely that the bank will do repairs on anything, especially yardwork.

I don't see anything wrong with offering them 75% of list. Be cautious if you find yourself competing with multiple offers. A few months back I had a client make offers on 6 or 7 bank owned homes, most had been on the market for 6 months or more. Each time, the bank responded that they had multiple offers on the property, and that we needed to come back with our highest and best offer. We sat tight, and watched the houses sit on the market for weeks and months more. It was a total line of bull. I think one of them is still on the market.

[Lip_Ripper Guy]

Well cost on a house is way more than $50-100k. You can sometimes pick up real good deals on houses at auctions, but they are few and far between. There was a new construction auction on Saturday, and there were some decent deals to be had there.

Most of the real good deals are picked up before they come on the market. The ones that come on have been picked through by Realtors and their investors.

[Bjjams]

I bought a forecloser last year and it sure can be scary buying a house "as-is", but if you are a smart consumer and do your homework you can get a fantastic deal if your willing to take the risk.

The first thing you should do is figure what fair market value is in the area your looking and get to know a good house inspector. After it is deemed a quality house and you know what a fair price would be go ahead and add up the cost to replace all major appliances (furnace, water heater, air exchanger,) and everything that you can't see (lawn, driveway) and anything else that seems subpar (carpet, flooring) and subtract that from the price. That should give you a good number to go off for an offer.

As was stated before most are bank-owned and the banks aren't interested in losing money so some won't come down in price at all. Even if it's a home you really want, walk away, it won't be worth it for the buyers remorse.

Don't be afraid to ring a few door bells of the neighbors, they will offer you the most insight into why the house is in forecloser. I got a deal on a house I'm quite proud of even with the value of homes dwindling. Odds are there will be a few surprises when you fire up the house again. I had a leaking faucet and toilet and the lawn was just about shot, but you should have bought the house for a price that even if everything needs to be replaced you still didn't get robbed.

[Enids Hubby]

My sister bought a foreclosed house last year . At the closing a issue with back taxes due caused a month or so delay. They ended up in a hotel for that time , paid for by the seller or closing company i can't remember which.

[Coach1310]

You definitely have to do your homework. I would say banks are going to be more and more willing to negotiate as the foreclosures become more and more. I think we are still a little ways away from the bottoming out of the market. Make sure to get it inspected and like others have said, negotiate. Don't get emotionally attached until you get everything checked out.

[Tom7227]

Don't count on county assessed values as any real indication of what a fair price is. First of all their data is at least a year or more old.

Interesting that people write that they have gotten a property for a certain amount off and saved money. I can put any price I want on my house and sell it for any price I want. Does that mean you 'saved' something, or does that mean that the price I sold it for was really the fair price?

If you don't know the condition of a home you have no clue if you're getting a good deal. An early poster wrote that you should add the costs to repair/replace all major appliances, carpet, furnace etc. Hopefully that's all you have to worry about.

I would be concerned about the basic quality of workmanship on some of these places. What corners were being cut as they house was being finished and the builder or owner started to see problems unloading it? What's the neighborhood really like? What was there before - did they build on marginal land?

I'd be hard pressed to jump into a new one right now.

[CJH]

Definitely get an inspection. My brother in law found a good deal on a forclosure this year. He had it inspected and they found a ton of mold in the wall shared with the garage. Turned out there was a leak. They were able to get the bank to pay for the damage. With a house that's been sitting, be very careful, as things can build up when they are neglected.

The bank also tried to play the multiple offer game on them. They made their initial offer (below asking based on the market price) and kept looking. After about 60 days, they gave the bank a withdrawl date. Guess what happened? On the night before the final day, the bank accepted the offer. Be smart and good luck.

Also, just a word of advice, buy within your budget and don't over reach. That's often why the house was foreclosed in the first place.

CJH

[Dozer]

How much does it usually cost to have a house inspected? Ive built a house with my father and he has build a couple on his own but neither of us really know what to look for on a deal like this.

[Lip_Ripper Guy]

Its anywhere from $300-400 to have a home inspected.

[Roofer]

Yes, My bro-in-law does that for a part time job. Some know their stuff, some don't. There is no license requirement.

Where is the place at Dozer? I could help you out, if you would like. Pictures could help everyone out also.

My Dad bought a repo last year. Kind of wierd, but we are in construction, so it's not too bad.

[bassNspear]

how does a guy find the listings of these homes?

[Dozer]

Hey Roofer,

Im assuming your in the roofing buisness? Ive been told that having a house un heated can cause problems with the roof from expanson and contraction? I cant really see this being true because there is insulation between the heat source and the actuall roof. I think the guy ment celing when he said roof. As canstant expansion and contraction will crack all the seams in sheetrock. We have a couple more houses to look at before we get too serious about this one but if we get more serious about this one I may need to have a good inspector to look at it.

[Roofer]

You're right. The attic temp should always be the same as outside temp.

Sheetrock mud can crack though.

You will have to make sure everything works before purchasing. just make sure you get the company's name that winterized it, and make sure they did do it.

The house my Dad bought said it was winterized, but after contacting the company, it was a different story. I can't remember if it was winterized too late or what, but some of the pipes were frozen and leaked when the water was turned on. He also had to buy a new well.

Good luck house hunting. It's a good time to have money and buy.