# Foreclosure homes



## roadless (Sep 9, 2006)

Has anyone ever bought a foreclosure? 
Any special things to consider? 
Thanks for any info.


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## Laura Zone 5 (Jan 13, 2010)

Yes, my last home was a foreclosure.

Get the best inspector money can buy. 
It's a time consuming process, especially if you have to deal with lawyers AND banks.
Make sure it was not used as a crack house or meth lab. 
The drugs get into the the drywall, and is a health hazard to the point that all of drywall will need to be removed.

Find an agent that specializes in foreclosed homes. They are tricky to buy.


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## TripleD (Feb 12, 2011)

We buy them for rentals a lot. Friday was the last day for my high bid to be upset. This was at the court house sale. Just found out I won. $ 42,500 and comes with a tenant paying $740 per month who wants to stay...:banana:


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## roadless (Sep 9, 2006)

My daughter and son in law run home inspection business!


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## Declan (Jan 18, 2015)

Yes but I bought as an REO property not at the actual foreclosure sale. All the usual suspects like inspections, etc. The banks will not allow you to change the name once you sign a contract so make sure you have everybody on the contract you want on the deed. On REO property they will sometimes pull the deal if someone else comes in and offers more, so be ready to move fast. If you buy at an auction, some will press the terms of sale (closing in 30 days) especially if an auction company is involved, otherwise, they usually recognize it ain't closing in two weeks or whatever the terms of the actual foreclosure sale were. You have to stay on top of it because the title search probably won't be done in two weeks. In my area, you are better off buying as an REO property (meaning the bank took it back as their own property at the foreclosure sale) because you can get it for less than the payoff you would have to pay at the actual foreclosure sale. Citi anything is hard to work with. YOu can make them an offer and they will auction it for less than the offer you made. Know a few people who saved boatloads of money by that practice of theirs.


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## TedH71 (Jan 19, 2003)

We did get one. Technically the person who bought it from the bankhad the former owner evicted since she wasn't paying house payments and the bank had to call the cops to get her moved out. She had been staying put in the house. He got it from the bank for $96k then we bought it from him for $124k. Turns out he couldn't sell it to us because she had filed an lien on the house due to her angry eviction (she was a hoarder of things apparently) so he had to hire a detective to track her down then bribed her with $10k JUST to get the lien released and she was laughing all the way to the bank so the guy who sold the house to us only gained $18k out the whole deal. The seller painted the house with crap paint and the kitchen was one of those "distressed" paint style that made it look more crappy. The house is actually worth $165k and will be sold much higher when we get done with it. We removed the massive bricked fireplace which was not used in the living room with an electric one that has lights and an heating element which looks excellent and we had a professional builder come and build a book case around it. Let me take a photo of it. You can't tell but the fireplace has light on inside..too bright, haha. I'll take a better photo later tonite.


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## Fishindude (May 19, 2015)

I bought one. It was a tear down and I knew it going in, so no surprises.
Wound up having to clean up a whole lot of junk left behind by previous occupant.


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## Marinea (Apr 15, 2011)

We live in a house we bought as a REO property. My biggest advice is to know that you need to move fast when you find one, and that the bank will move slowly. We found our place, we found out later, the first day it went on the market. There were three other offers that day, because of what a god deal it was. Ours was a simple cash sale and our only condition was a specified possession date as we were moving several states away. Despite the long lead time and the fact the bank had our payment for the property, we had to cut the lockbox off the front door when we arrived, and the paperwork was not completed until a month after we moved in.

I agree about having a very thorough inspection, but know that the bank will almost surely say "as is". Use the inspection info for price negotiation if you can, and then use the report to start your "honey do" list.


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## Declan (Jan 18, 2015)

Marinea said:


> We live in a house we bought as a REO property. My biggest advice is to know that you need to move fast when you find one, and that the bank will move slowly. We found our place, we found out later, the first day it went on the market. There were three other offers that day, because of what a god deal it was. Ours was a simple cash sale and our only condition was a specified possession date as we were moving several states away. Despite the long lead time and the fact the bank had our payment for the property, we had to cut the lockbox off the front door when we arrived, and the paperwork was not completed until a month after we moved in.
> 
> I agree about having a very thorough inspection, but know that the bank will almost surely say "as is". Use the inspection info for price negotiation if you can, and then use the report to start your "honey do" list.


The realtor had given me the lockbox code when I first looked at mine before it ever went to REO auction. It was almost the same as the last 4 of my parents' phone number so I remembered it easily fortunately because the same thing would have happened to me. The plus side was I was in that house a lot inspecting it before the auction and was able to go ahead and start cleaning/working on it in the 30 days between the auction and closing.


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## MO_cows (Aug 14, 2010)

We have bought foreclosures. The real bargains seem to be gone now. Our "best buy" was a 2 story, circa 1900, wraparound porch with turned posts, on a corner lot with detached garage, for $12k. Officially it's only a 2 BR but build a couple closets and there could be 4. The plumbing was all freeze damaged, had to redo about all of it, also some electrical work and a lot of cosmetic work-paint, flooring, deep cleaning. If it went on the market tomorrow, it would be worth around $80k with nowhere near that in it. But we don't own it any more, it was bought to solve a crisis in the family and we've since been paid back. Now, I wish we could have found 10 more like it! 

The others weren't quite so big a bargain, but still a whole lot less than what it would cost to build them, or to buy them normally. The last one earned the nickname "Money Pit" because everything that could possibly go wrong, did. But got it fixed up and rented with some equity still in it . 

You need a good inspection, DIY skills, and a deep contingency fund, to make the most of foreclosures.


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## terri9630 (Mar 12, 2012)

The place we're fixing up for retirement was a REO. We got a great deal on it. The house is a gut job, we knew that, but it had a 2 bed 1 bath 1200sq ft house with 10 acres, electric, septic and well and a 2 car garage for $23,000. We pulled money out of our 401K and paid cash for it. We will spend the next 3 years remodeling the house so it is exactly what we want. We went through the county records looking for leans/second mortgage and any other judgments. The county clerk was almost useless but the lady at the tax accessors office was a huge help. 

I listed the well, septic and electric because the property is remote and most in that area don't have any of those. Lots of them have a composting toilet and haul water in. The property next door to ours is 21 acres, sold for $33,000 with nothing. The new owners just spent $11,000 having a well dug. I don't know what they paid to bring the elect onto the property. Didn't want to be too nosy.....


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## Marinea (Apr 15, 2011)

Terri's post made me think of something. If you buy a REO property, add the condition that the seller provide you a title insurance policy. It was cheap for them, and can save you headaches.

I am going to add a semi-related PSA here. If you are a lower income family, the USDA has two fantastic programs you are likely not aware of. The first program is a loan program for home repairs/improvements. You can borrow up to 20k at one percent interest with up to 20 years to repay. We used this program to get a new metal roof, add a 8x10 pantry and a back porch.

The second program is a grant program. It has the same income requirements and an added requirement that at least one of the homeowners is 62 or older. This program grants up to $7500 for home repairs. It does not have to be repaid and the only condition is that the house not be sold for three years.

The main condition to both of these programs is that all work must be performed by licensed contractors. This is because the USDA looks at the work afterwards and requires the contractor to give a one year warrantee. On the other hand, the USDA went out of their way to work with us and show the removal of our front deck and replacement of it with a large covered porch was a repair and not an improvement and therefore qualified for the grant.

Hope this helps someone. I found out about these programs totally through the hand of God, and believe it was so I could help others in the same boat we were.


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## sss3 (Jul 15, 2007)

Marinea Could you provide a link about these programs?


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## roadless (Sep 9, 2006)

Well I put in a cash offer,quite a bit below asking price.
Waiting to see.
It would be awesome to not have a mortgage .
The place certainly needs work, but it is only 720 square feet, one story, rather simple.
I'm not afraid to get my hands dirty!


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## Marinea (Apr 15, 2011)

sss3 said:


> Marinea Could you provide a link about these programs?


No link, but it's the Rural Development section of the USDA.


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## mnn2501 (Apr 2, 2008)

TedH71 said:


> We removed the massive bricked fireplace which was not used in the living room with an electric one that has lights and an heating element


Ruined it IMO. How do you heat the place if the electricity goes out?


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## roadless (Sep 9, 2006)

They did not accept my offer. 
I went up a few thousand but I can't do much more. 
Arrgghhh.


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## TedH71 (Jan 19, 2003)

Electric fireplace. Safer alternative and much more marketable. You can even run the fireplace lights with no heat or just heat without the lights or both. The brick fireplace was eating up 1/4th of the living room space. Once it was taken out, much more room was opened up and I didn't have to worry about my kids falling or banging themselves on the fireplace bricks. The bricks were really big and jutting out. Not worth the hassle.


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## TedH71 (Jan 19, 2003)

The place does not heat with gas. Never has plus the house is really insulated good so no worries if the electricity goes out. It rarely has gone out.


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## roadless (Sep 9, 2006)

My offer was accepted. 
Time to roll up my sleeves!
I'm sure the town inspection will give me a long list to take care of before they issue a Certificate of Occupancy.


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## oneraddad (Jul 20, 2010)

That's awesome roadless, I'm happy for you !!!


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## po boy (Jul 12, 2010)

sss3 said:


> Marinea Could you provide a link about these programs?


USDA Home Loans Scroll down..


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## roadless (Sep 9, 2006)

Thanks raddad! 
The trick for me is to not get overwhelmed, just take one thing at a time...


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