Buying a Foreclosure

arbolita

Anybody here do this?  There are currently two houses we are looking at, and they both happen to be forclosures, so I wanted to get advice from people who have gone through the process.

Night_Sprite

I think maybe Katiewhompus is or was?

danieliza1127

I don't usually recommend the Nest, but the Buying A Home board on the Nest was really helpful when we were buying our house.  You might check it out.

arbolita

Thanks Dani, I'll probably check over there at some point - I've just been kind of turned off TheNest boards after hearing so many people say they'll post a question, but since they're not regulars nobody answers them.  So I figured I'd try where I know people first

danieliza1127

Yeah the other boards on the Nest I do think are like that, but the house one was helpful.  I posted there for a while when we were buying and answered some questions there after we bought.

ivystar57

I think it can get really tricky... we had a friend who put in offers on two, but were beat out by investors.  It sucked because the Bank just wanted their money NOW, so they took the deals that had more cash involved.

and I've always had people respond on the Buying a Home board, even though I'm not a regular.  They are very nice.

vallyhoo

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-foreclosure?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:cb7ccebb-709c-442e-9644-d8f645f1d961Post:74722a88-7e21-4a94-b25f-ca5c4dce79fc">Re: Buying a Foreclosure</a>:
[QUOTE]I think it can get really tricky... we had a friend who put in offers on two, but were beat out by investors.  It sucked because the Bank just wanted their money NOW, so they took the deals that had more cash involved. and I've always had people respond on the Buying a Home board, even though I'm not a regular.  They are very nice.
Posted by ivystar57[/QUOTE]

Pretty much this, exactly.

My cousin was just beat out by investors for a foreclosure and then the investors contacted him to buy it off of them (WTF?).

The best tip I've heard to date is that you should get a Pre-Approval NOT a pre-qualification. If your mortgage is pre-approved you can negotiate as if you were a cash buyer. Thank you HGTV.

ivystar57

Vally, are your friends my friends?  Because my friends have put FIVE offers in on houses (me thinks they may need to stop trying to low ball...)  The most recent offer was snagged by an investor, who then turned to my buddies offered to let the carpenter in the couple fix up the home, and then he would sell it to him.  It's an odd situation, but I think they may actually do it....

vallyhoo

Well, I've got friends in low places so I don't know that you'd want to claim them as your own.

I wish I had a friend who was a carpenter. Oh wait, I do, and his birthday is coming up  ;-)

*lightning strike*

arbolita

That's really helpful advice about the investors - does that mean there's not really any wiggle room regarding the listed price?

cmhershey

Another thing to also consider.  Most foreclosures are 'as is', meaning that there is no home inspection.

vallyhoo

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-foreclosure?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:cb7ccebb-709c-442e-9644-d8f645f1d961Post:1b4523f2-878a-4fc3-866b-c4f9628d8387">Re: Buying a Foreclosure</a>:
[QUOTE]That's really helpful advice about the investors - does that mean there's not really any wiggle room regarding the listed price?
Posted by arbolita[/QUOTE]

In my experience, yes. OR if there is wiggle room on the price of the house, the bank will do very little as far as closing costs or other concessions. And if there is any damage, which an owner could be responsible for repairing, there is no way the bank will fix a thing.

We looked at a place that needed an entire new kitchen ceiling. The bank was willing to work with us on the price but not repair the ceiling... then our bank wasn't willing to finance a house without a ceiling so we would have had to fix the ceiling before buying the house which wouldn't have worked.

ivystar57

I agree with Vally.  I think there is a lot less wiggle room on foreclosures.  I think you are less likely to get concessions and they do typically sell "as is".  I don't think that means you can't get an inspector though.  Check with your agent and see if you can add an inspection contingency... I wouldn't buy a house without one.  At least then you KNOW what the issues are and can make an educated decision about whether to move forward with the contract or walk away.

kristinanddan

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-foreclosure?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:cb7ccebb-709c-442e-9644-d8f645f1d961Post:84d27595-784b-4b6e-80fa-6868953cd44a">Re: Buying a Foreclosure</a>:
[QUOTE]Another thing to also consider.  Most foreclosures are 'as is', meaning that there is no home inspection.
Posted by cmhershey[/QUOTE]

You can have a foreclosure inspected, the bank will just more than likely not fix any problems that are found.

OhPoopy21

We bought a short sale earlier this year - but we were looking at foreclosures too.  You CAN get an inspection on the property, but you usually can't take back your offer if something seriously wrong shows up in the inspection - so we got an inspection before we put in the offer.  And listen to Valley's pre-approval vs. pre-qualification advice, she is wise.

Oh, and yup... beat out by either an investor or someone that knew the selling agent because it sold for the same price that we offered, and we submitted our offer first. 

cmhershey

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-foreclosure?plckFindPostKey=Cat:Wedding BoardsForum:9Discussion:cb7ccebb-709c-442e-9644-d8f645f1d961Post:bf6f2ab3-5fa2-47cf-87a4-0b95eb13ce84">Re: Buying a Foreclosure</a>:
[QUOTE]In Response to Re: Buying a Foreclosure : You can have a foreclosure inspected, the bank will just more than likely not fix any problems that are found.
Posted by kristinanddan[/QUOTE]


This too.  <img src="http://cdn.cl9.vanillaforums.com/downloaded/ver1.0/content/scripts/tinymce/plugins/emotions/images/smiley-laughing.gif" border="0" alt="Laughing" title="Laughing" />

ac_in_dc

Just make sure you have a home inspector that is *really* thorough...maybe see if you can have a contractor. Typically you can back out of a contract within a number of days without losing your $$ if you don't like the results of the home inspection. Make sure that's true with your contract/in your area and you should be covered.

In this economy I've actually found it easier to find quality contractors for repairs/remodelling, etc. than it was a few years ago, so you don't have to be afraid of problems with a house. You just want to be informed so that you can budget that in with your offer.

TurtlesAllTheWayDown

In Response to <a href="http://forums.theknot.com/Sites/theknot/Pages/Main.aspx/wedding-boards_etiquette_buying-foreclosure?plckFindPostKey=Cat:Wedding%20BoardsForum:9Discussion:cb7ccebb-709c-442e-9644-d8f645f1d961Post:84d27595-784b-4b6e-80fa-6868953cd44a">Re: Buying a Foreclosure</a>:
[QUOTE]Another thing to also consider.  Most foreclosures are 'as is', meaning that there is no home inspection.
Posted by cmhershey[/QUOTE]

My mom is a real estate agent and that's where she says you need to be careful. If people don't have the money to pay the mortgage, they don't have the money to keep up with house repairs. Some things could be easily fixed (new paint), some might be pricey (new roof, new septic, burst pipes). In addition, there's a foreclosure near me that's been vacant for 2 years. Not in great shape. There might also be back taxes and back utility bills associated with the property, so you definitely want to look into that before you commit.

squirrly

FBIL bought a foreclosure earlier this year.  He actually did negotiate quite a bit with the bank.  They had some odd requests, and when FBIL decided he'd had enough and walked away from the negotiations, they came back with an offer 30k less than the previous price & he got the house.  It needed a lot of work, though.  The attic was infested with squirrels (no connection to SN), the pool was in disrepair, hot water heater had rusted out, etc. 

I think every experience will be vastly different.  However, the biggest thing is to make sure you get it inspected & have some idea of the cost of repairs, and adjust your offers accordingly.  And make sure that you have the time & cash to make the major repairs immediately.