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Thread: Buying a foreclosure. Anyone done it?

  1. #1
    Join Date
    Dec 2010
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    Default Buying a foreclosure. Anyone done it?

    I'm wanting to get into a smaller house with more land and was considering buying a foreclosure (or at least start looking) but have been getting a lot of "advice" that it is not worth it. Granted most of it came from realtors who have a vested interest in selling me a regular house so I took what they said with a grain of salt.

    I've been told
    1) it takes too long 9-12 months on average
    2) the banks (who usually own the homes) are asking market rates so you can't get a deal like you could in the past.
    3) none of the foreclosed houses are worth buying. They are all trashed and in bad neighborhoods. If the previous owner could have sold it instead of being foreclosed on don't you think they would have?

    So anyone with first hand knowledge or experience?
    When seconds count the police are only minutes away.

  2. #2
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    KC, Misery-- It's Missouri- you have to 'Show Me'...
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    Never hurts to look...

    I actually worked at a few S&Ls back in the late 70's/early 80's... Homes were foreclosed for many reasons, many different areas and in many different conditions... We wanted them off the books ASAP... The time it takes to get out of the legal system depended on state laws...

    Interest rates were as high as 18% on mortarages when I left...
    Last edited by HatetosayItoldyouso...; 10-13-2015 at 09:48 PM.
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  3. #3
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    You can still get good deals, they usually need work, and won't go FHA if they do, so be ready to do conventional, or FHA 203k which is rehab financing, and kinda sucks to deal with. You can close a foreclosure in 30-60 days. Lots of realtors don't like doing foreclosed houses, because guess what? The bureaucracy is a pain. When I used to do them, before digital submission to the bank was available, we had to sign, and fedex offers to Dallas, and they would be turned down if signed in the wrong COLOR of ink. I've heard it's way easier now, and HUD tends to favor owner occupiers vs. investors when comparing identical offers.
    Common sense is so uncommon nowadays it ought to be reclassified as a super power

  4. #4
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    No..... I do dabble in real estate and sleep at the holiday inn quite often don't let a good deal pass you by just because it's not a foreclosure. Not all foreclosures are rough or bad, there are plenty of homes on the market that are in need of considerable repair. Of the many homes I've purchased, none of them were on the market. Know your budget, find something you like make an offer. Worst can happen is they slam the door in your face.....or accept the offer....I should add, research the property to make sure it suits you.
    Don't bring skittles to a gun fight.

  5. #5
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    Helena Montana
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    On the real estate topic we have bought our last two properties by finding a for sale by owner that wasn't moving on the market. One we had to get creative with financing and the other I came into and fixed a few things in the house so it passed lender approval. Be diligent and persistent and work at it.

  6. #6
    Join Date
    May 2011
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    Outside of Navasota Texas
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    I don't know the laws in Colorado but here in Texas the only way to get a good deal on a foreclosure is to go to the foreclosure auction.

    In Texas, once the bank takes a home back they have to auction it off at the county courthouse in the county where the house is located. They have to post the listing in the courthouse before the auction.

    The bank will send a representative to conduct the sale. The representative will bid for the bank. The bank will normally bid at market value if they want to keep and sell the house later. If they don't want to keep it they will bid from zero up to the payoff amount on the mortgage.

    It is easy to buy the houses, way easier than a normal home purchase. The bad news is the sales are CASH ONLY. Once your bid is accepted you owe the money right then. Cashiers check are accepted as cash but you have to pay the exact amount. So you need cashiers checks in various amounts to equal the sale price.

    I am not wealthy enough to buy them that way yet but I turned my parents on to the process and they have purchased 10 or so properties in the last 8 years or so.

    All of the properties will need work, some take 20-30 thousand to fix up. You don't get to view the house first, just drive by with binoculars and a camera.

    This is the only real deal in foreclosures, if the bank buys the home at the sale and list it with a realtor it will be at market vale minus the repair cost needed to fix it.

  7. #7
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    Dec 2012
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    Sacramento, CA
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    We bought a short sale house about 5 years ago. The bad is it did take longer, more paperwork and your buy the house as is. You can do a home inspection but don't expect the bank to fix anything. The good is you'll probably get it below market and will hopefully start building equity right way. We sold that house in April for twice what we paid for it.

  8. #8

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    I have bought several. (I have bought 4, with 1 pending, this year.)

    1) I usually close in 45 days or less.
    2) I never pay market. Ex: pending house is under contract for $87k and a house with the same floor plan a few doors down just sold for $140k, two weeks ago.
    3) House in example above just needs paint, new carpet, and appliances. In the 4 houses I have completed this year I haven't spent more than $15k on renovations (and that house had the dinning room ceiling laying in the floor due to a roof leak). All have been in $120,000-$140,0000 neighborhoods.


    Foreclosures are a great way to buy and have instant equity in your home. Especially if you can buy now, move in later. I recommend getting an inspection, they won't fix anything but sometimes it can be used to lower your purchase price. Don't be afraid to walk away from a house.

    As far as aggravation, the VA is the worst! in my experience. You can work with them, but they always take longer and want way more information than most others.

    Financing: My bank(s) will only do 85% of total cost (purchase + renovation) and 4.5%-5.5% interest. However, these are investment properties and I'm not going to live in them. They may work a better deal for a primary residence.
    Last edited by rankhornjp; 10-16-2015 at 07:35 PM.

  9. #9
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    Outside of Navasota Texas
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    Rankhornjp,

    I am curious as to what area you live in, no need to disclose it publicly or at all if you don't want too.

    In my area of Texas purchasing from the foreclosing bank is rarely as good of a deal as you have been getting. Of course my area never had the "housing bust" either.

    In my opinion your paying too much in interest for the current market, but my bankers will only finance 80% NOT including repairs. I guess giving a few percent on interest might change that.

    It sounds like you have a good area for buying right now. Good luck, I don't know whats coming in the future but "they aint makin no more land".

  10. #10

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    Quote Originally Posted by Revolution View Post
    Rankhornjp,

    I am curious as to what area you live in, no need to disclose it publicly or at all if you don't want too.

    In my area of Texas purchasing from the foreclosing bank is rarely as good of a deal as you have been getting. Of course my area never had the "housing bust" either.

    In my opinion your paying too much in interest for the current market, but my bankers will only finance 80% NOT including repairs. I guess giving a few percent on interest might change that.

    It sounds like you have a good area for buying right now. Good luck, I don't know whats coming in the future but "they aint makin no more land".
    I live in southern Ga. I've shopped around local banks and their interests rates are pretty consistent for investments. I wish I could find a cheaper rate for my rental houses, but the house I flip I don't really keep long enough for the interest rate to matter a whole lot.

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