Home > Guides > Home Buying > Find a house > Why you should, or shouldn't, buy a foreclosure

Why you should, or shouldn't, buy a foreclosure

By Trulia | Published: Oct 14, 2009 | 51 Comments

Home buyers may be able to get deals on foreclosures, which are often discounted in price, but buying foreclosures can be risky. It's essential to understand the pros and cons of buying a foreclosure before making a purchase.

First of all, there are several types of properties that are generally known as "foreclosures." A "pre-foreclosure" is a home which is in danger of falling into foreclosure, but is still owned by the homeowner. A "foreclosure" is a property that will be sold or repossessed by a creditor or a lender to recover the amount owed on it.

While pre-foreclosures are available for purchase from a homeowner, foreclosures can be bought at auction or as "bank-owned properties" (also known as "real-estate owned" properties) from a lender.

Pros of buying a foreclosure

You may be able to purchase a home at a lower-than-market-value price. If the home is in pre-foreclosure, the homeowner is looking to sell the home to avoid going into foreclosure. These homeowners are usually in a hurry to sell, putting buyers at an advantage.

Banks are also often willing to offer foreclosures at a discount -- the longer they hold these properties, the more it costs them in terms of taxes, maintenance, etc.

Foreclosures can be found at all sorts of price points (starter homes, luxury homes, etc.) and sometimes are only in need of minor repair or upgrades.

With some sweat equity, repairs and upgrades, a homeowner can turn a foreclosure into a home and see some appreciation in the property's value.

Cons

Since foreclosures are often offered at significant discounts, you may face steep competition and bidding from other buyers.

Foreclosures aren't always offered at a large discount. Homeowners in the pre-foreclosure stage may price a home higher than it is worth in the hopes of paying off a mortgage, taxes, etc. Banks are looking to recoup at least what's owned on the house, so they may only offer a slight discount.

If you are buying a foreclosed home at an auction, you may have to pay cash (the same day!) and may not be able to inspect the home before purchase.

Some lenders don't offer loans for distressed properties.

Foreclosures may need serious and costly repair. The previous owner might not have been able to afford fixes for the property and may have allowed it to fall into disrepair.

Foreclosures are often vandalized and looted; it's not uncommon to find major appliances missing, holes kicked in the walls and other vandalism.

Foreclosures tend to sit vacant for periods of time, which causes major maintenance issues. If a home is not maintained, its pipes could freeze, vermin and bugs could settle in and mold could grow.

You need to do your research -- a foreclosure can have liens attached to it. You may find yourself having to pay costly old debts associated with the property.

Foreclosures often are sold as is and banks often aren't interested in making or footing the bill for repairs.

At times, foreclosure buyers have to start eviction proceedings and pay legal fees to get the previous tenants/owners out of the home.

Purchasing a home from a lender can be a lengthy and time-consuming process that's full of red tape.

Comments

By Henry,  Mon Dec 21 2009, 07:01
I agree. We are finding this out the hard way. We face major compitition for each bid. we have yet to sign a deal. It seems to me that the market is being manipulated by the lenders and the agents.
By John G,  Sun Jan 3 2010, 20:43
Henry,

We have been making offers through a r.e. agent for a year+, with barely a counter (except for one of his props.) until recently actually...when we did get a 2nd chance after sitting in the back up position. Then I decided to try a different approach...and track down the listing agent...guess what...got the counter...and finally got the accepted offer (no one else would accept the terms) but also the l.a. of course was pushing our offer since they would get both the buyers and sellers commissions...it's a long story from there...and you must accept the agent is now "representing" both you and the seller (and I doubt ever equally!)...but I will bet you that you will get much closer to your accepted offers...I've essentially stopped using my agent and I'm flying solo! Good Luck!
By Kelli Geddeis,  Wed Jan 6 2010, 06:16
What should irritate most consumers is that I partially agree with Henry that it is being manipulated, but I don't agree that it is by agents. Of course I am one, so I am biased. However, what I am most infuriated by that so many consumers are angry that they can't get to a signed contract due to multiple bids,minimal counters and acceptance. Does anyone not realize that there are multiple bids due to the fact that the banks are pricing these properties too low - otherwise you wouldn't see this multiple bid situation. I know buyers want the best buy they can get - don't we call on everything we purchase - but this is hurting everyone that wants to buy and those that want to sell in the areas where this is occurring regularly. As we have seen in other areas of our economy, getting the best buy isn't necessarily "best" for everyone in the long run.
By Maikov Moffatt,  Wed Jan 6 2010, 18:50
From my experience, has a Realtor, showing foreclosures in New York City, I have had bad experiences. Foreclosures are priced at discounted prices, but 95% of foreclosures are in bad shape. Think about a foreclosure, which was seized from a homeowner, who could not afford the mortgage. If a homeowner can't afford a mortgage, they can't afford the repairs, while living there, so once the bank seize the property, and list it back on the market, property is sold as is. I have seen foreclosures with mold issues, foundation problems, plumbing isssues, roof issues and any other underlining problems. Foreclsures are not the best buy for conventional homebuyers, because it will cost to fix that home for move in conditions. With home prices low, there are so many deals on the market in move in condition to purchase.
By Monamarie Mccreary, SFR,  Wed Feb 24 2010, 08:01
We bought a bank owned property (foreclosure) in 2008 and it was in pretty good shape but we gutted it anyway so we could customize it the way we wanted it to be. We bought it at such a good price that we could afford to do the remodeling.

The challenge in buying this house was not the condition because we hired an inspector and knew what we were getting into, but the bank contract that we signed with the bank to purchase the house basically stated that they were not committed to selling to us at any time until it was actually closed. So if another offered came in that was higher than ours, even after we spent the money for the inspection and spent the money for the appraisal, they still could option out. But we were able to close before they exercised that option....
I haven't sold many distressed properties but I know from personal experience, we wrote many, many offers before we bought in 2008. It's a challenge but if your patient and do your homework, you can pick up some great investments.

Best wishes,
Monamarie McCreary
Real Estate and Mortgage Broker
By Athena Chilicas Saldanha,  Thu Jun 3 2010, 20:44
As a Realtor with a business arm that focuses strictly upon the foreclosure market, I agree that the process can be very tricky and not very transparent. This is the exact reason that I strongly suggest that buyers who are willing to take risks ensure that their Realtor is knowledgeable and extremely experienced as the nuances of selling a foreclosure property are completely different than buying a non-foreclosure property.

I worked with one client who bought a 3 bedroom home the East Willows of Menlo Park for 290K and today the fair market value is over 450K!! I also helped another buyer purchase her first home in for 350K and she loves the yard! Incredible opportunities!!

You can always contact me for more information.

Athena Chilicas Saldanha
Realtor
Certified Foreclosure Specialist
By Susan Latham,  Wed Jun 23 2010, 19:04
Many foreclosure properties are a great opportunity for owner occupants, and others are best left to the cash buyer investors. If you have a knowledgeable agent, he/she will guide you through the process. The larger corporate owners are more willing for the most part to bring the properties to financeable condition and are looking for a fair market price for the properties that they are holding. If you are looking at the lower priced properties, and you're not a cash buyer, be prepared to be approved for a mtg that will be higher than the purchase price as a rehab mtg. With this type of financing, you will be able to purchase the property, and then have the financing in place to perform the required work to bring the home to avg or better condition. This will involve an "as improved" appraisal and in most cases, at least here in NH with the programs offered, will give you 6 months to complete the reno's. If I can help you get through that process, don't hesitate to contact me, I am very seasoned with these types of sales.
By K,  Sat Sep 11 2010, 11:02
The banks seem to be controlling availability of foreclosure properties on the market to make sure prices stay high. What I am seeing is overpriced junk, that has been left empty for a very long time; vandalized, leaky roofs termites and other potentially major issues. Auctions tend to drive prices up, way beyond what the property is worth. Serves the banks very well but not a home buyer. Banks hold all the cards and will never make a decision that doesn't absolutely maximize profits. (Does anybody remember how we got into this mess in the first place?)
By Anne Borman,  Wed Sep 15 2010, 15:02
I appreciate all these words of advice. we have never bought a house. Maybe we don't belong in foreclosures!
By Casey,  Sun Oct 24 2010, 11:35
watch out for people bidding against you they are from the bank
By Howieg,  Fri Nov 12 2010, 18:08
Remember the old saying: "What you don't inspect, is suspect".
By Gerard J. Carney,  Mon Dec 6 2010, 17:06
Please always look into what foreclosed homes have to offer. They are usually good deals, so you can make good on buying them. But importantly they keep our market surpressed because these are stressed propoerties that keep the rest of the market down
By Longshot7,  Sat Dec 18 2010, 12:07
Is There a good foreclosure agent in the Burbank, California area. If so call me at 925-283-9878. Doug Schneider
By Isela,  Tue Jan 18 2011, 18:11
ok so i see this house going up for auction but i believe i have to put down $2500 i guess they will hold this it is going for 16k if i bid how can i be sure ive won does this mean they will hold my money ?????
By Everybodywins,  Sat Jan 22 2011, 13:55
This is a very good article. Foreclosures can be both a blessing and a curse. You really need to know in advance what you are getting into and spend lots of time doing due diligence.

Frank
http://GoldsmithandCompany.com
By Olemissreb,  Tue Feb 1 2011, 10:54
I have to disagree with Kelli Geddeis. I am most infuriated as a consumer that property owners, sellers, and realtors encourage inflated prices and certainly discourage transparency. Then when you have a total idiot when you try to buy or sell a property there is little recourse to get that person out of the way to close the deal. I know, my realtor sent my documents to wrong closing company twice, and other errors, and it took 7 months to close. I had to bring in a broker willing to assist in the purchase process between my realtor and the seller's realtor. Yet this idiot still received his commission. The fact that inflated property values are falling to a realistic price point is not the issue. The problem that these properties were sold and appraised at unrealistic values and banks approved loans on those inflated prices is a problem. As a consumer and a person who must pay a commission in selling or possibly buying a property; I should have the right to make my decisions in a very transparent market place without the manipulation of banks, developers, and realtors. Bidding is fair market activity at it's basic level.
By Pat Baker,  Fri Feb 4 2011, 16:21
The big comment here is that "Banks are looking to recoup at least what's owned on the house, so they may only offer a slight discount" Generally they jack up the price. I call it a "pig in a poke." The reason I do is that you can inspect the property and exect to have anything done or any history. Everything is shut off. You can inspect after but then the damage is done. I do not recommend foreclosures further because there are all kinds of title issues and sometimes the bank does not have title which is a subject for another blog.
By Judy Sharma,  Wed Mar 2 2011, 22:55
I have both kinds of experience where I could not get a property for a client even though we were 10% higher than the asking price. On the other hand, I bought a property for ourselves and I believe we got a great deal. I think the key is home inspection.
By Dee,  Sun Mar 27 2011, 11:02
I noticed this in San Antonio, TX. When a condo or a home in a specific neighborhood has many forclosures, there's often one of the same type and size property nearby that is listed at a much lower price - and is not a forclosure. Is this unusual and will the less expensive property be unavailable - like in a bait and switch game?
By Ceciliarafael,  Tue May 3 2011, 11:07
WANTED: foreclosure specialist agent with experienced dealing with canadian buyers? looking to buy in orlando, florida. email me _cecilia@live.ca of foreclosure properties below $50k. any style.
By Deborah Griffin,  Sun May 29 2011, 07:49
Great post! There is a risk for every reward. What most buyers don't understand is the bank is in control. If you do not agree to their addendum and terms, they will not change them and you have to accept them or move on to find another home.
By Raqueltoscano35,  Sat Jun 18 2011, 09:32
I had such bad experiences with the agents, that I some what agree that most of the time its best to do our own. Again my respect for those who are dedicated to there jobs, but it is just so hard to trust again. Not understanding how to play the game out there ,it is difficult and fustrating. I picked up the game along the way ....
By Achnoicken,  Thu Aug 4 2011, 08:37
Seems like a lot of foxes in the chicken house!!
By John Souerbry,  Wed Aug 10 2011, 05:38
Bonnie - There certainly is a story behind every foreclosure, and behind every standard sale as well. Many of us do track the pre-foreclosure/notice of default lists to offer sales assistance to those in a tight spot regarding their mortgages. With so many home owners having over-borrowed against homes that have lost value, it often seems like trying to drain a swamp with a tea cup.
By Briandoebler,  Thu Aug 11 2011, 05:23
Good Morning! Interesting comments by all! Unfortuantely, most of the comments posted are from a single point of view. I have been in the Banking industry and a private investor of real estate for the last 6 years. I have bought and sold privately, at auction, and through a realtor. I agree that there are good and bad experiences on both sides of the fence. I would like to make a few basic points. Do your homework, educate yourself on property liens, title opinions, judgments, easements, terms of finance etc. Nothing is for free....you create your own "luck" by due diligence. Second, Banks are the 21st century supervillian....and granted some of them have earned that reputation. Unless you personally see the paperwork on these deals, don't assume they all work the same. I assure you they lose money quite often....its hard to show sympathy due to the economy and media image...but some of these banks are owned and employed by your neighbors...and alot of them are in the same boat you are. Last, not all realtors are the same! Here are some things to look for in a good realtor. 1. Do they listen to your needs? Do they follow up with you to make sure your satisfied? Do they explain things to your satisfaction? Do they drop you after the contract is signed? Are they knowledgeable of the area....prices can vary in 2 city blocks. If you are going to buy foreclosures it takes work, knowledge and patience.....but it is worth it. Good Luck
By Lynn Bowen,  Fri Aug 12 2011, 09:24
Bonnie, many actually do try to help out those in trouble and who stand the chance of loosing their home thru foreclosure. In many cases the homes are not worth what is owed on them so then they are dealing with a short sale. Unfortunately the banks and servicers have not all figured out how to manage these short sale transactions in a timely or reasonable manner. I have managed transactions on both side of the table with regards to short sales. I have represented sellers and buyers. I have to see each one I have attempted has eventuatlly closed escrow but only after quite a long ordeal for everybody involved i.e. the sellers, the buyers & the realtors. Unfortunately the banks do not always make sense and put up a lot of roadblocks and just take soooo long to make decisions that the buyers get tired of waiting and go elsewhere with a new home to purchase. Generally speaking most of the buyers that start out thinking they want to buy a short sale end up trying a few times and then go for the more sure thing which is either a bank owned property or one where the seller actually has some equity. If the bankds could get their act together and streamline the process it will help alot of howeowners out of the foreclosure situation. Wachovia is a bank that seems to have it down with a streamlined process. Hopefully this will get better, we all thought that the HAFA program would help but the HAFA's I've been involved with are really not that much better. Anyhow people ARE trying to help out these homeowners, many realtors do just short sales and are doing their best to help them to sell their homes but the roadblocks sometimes slow the processs down so much that they end up foreclosed on while waiting for answers to happen.
By Calvin Hunter,  Wed Aug 17 2011, 09:02
The foreclosure market is a racket. The banks couldn't care less about the home or people who lost the home. They couldn't care less about maintaining the home while it is vacant. they couldn't care less about the neighborhoods that suffer as a result of homes going to hell because they are not maintained. The banks have what they call "auctions" to move the house. These are not auctions. The starting prices are higher than market values. They have ringers at the "auctions" to keep the prices high. You are bidding against a ghost. After the properties are sold the banks sue the previous owners and collect from the mortgage insurance company. The properties being sold need costly repairs with no guarantees. It is a racket folks and the realtors and appraisers are in on the scams just like they all were 5 years ago when houses were overvalued by 500+ percent. If you want a house then find a FSBO and work with your own title company to handle the paperwork. Go to your own lender and process your own deal. Right now the realtors are in a race to the bottom of the price scale. Wake up and stop getting scammed.
By Tom Brodersen,  Mon Sep 12 2011, 04:59
Buyers of REO properties need to understand that there can be serious problems with the title to the property, once it has been through a foreclosure. We've all been amazed at the revelations of the Robo-signing scandal. There are other defects in the foreclosure procedure which may make it vulnerable to attack by the original owner, even years later. If he was never served with process, for example, and the basis for serving him by publication (which happens much more than you may imagine), the Court never actually took jurisdiction over the person to terminate his interest in the property. In those cases, the judgment of foreclosure is VOIDABLE by the original owner, even years later. Even if you have title insurance, you won't recover all of your investment in the home, in all probability.
By A. Lee Hemberger,  Thu Oct 6 2011, 00:42
I've worked in the secondary mortgage market for several years, through good times, the train wreck, and the aftermath. While I can't divulge too much of the internal affairs of my industry, I will say that REO inventory is much larger than the staff employed to manage the same.

Here's an industry secret: the factors that have the most impact on these REO assets' lack of mobility can be attributed to the following scenarios:

1. A significant portion of housing inventory are frozen in litigation (either individually or as part of a large pool of loans), which has resulted in such a backlog in the court system that it may take several years to process (while the borrower remains in the subject property totally rent free, tax-free and without any concern of eviction).

2. Generally Accepted Accounting Practices. Simply stated: a REO property is assigned a higher value while it remains a bank-owned, (or in the case of a Mortgage-Backed Security, an investor-owned) "asset". Once the property is sold, the property's liquidated amount is often considerably less than its assigned value as an asset. This loss becomes "actualized" and reported as such on the company's balance sheet.

Most of the company's that insured these loans (individually or as part of a larger pool) have gone bankrupt reimbursing these losses, so in most cases, the losses are now absorbed by the lender, the loan pool's investor(s) or the most frightening of all, the US Federal Government. Therefore, the liquidation of REO inventories must continue at a slow pace. If the banks and government did not regulate the volume at which these losses are "actualized", the financial impact to the US economy, and by proxy, the world's economy, would be nothing short of what scientists might refer to as an "extinction event".

The losses estimated to be associated with the REO inventory as it stands today makes our national debt of $14.4T look like something the tooth fairy might leave under our children's pillow. But hey, this is most likely the best buyer's market we'll ever see! If you have any skin left in the game, buy, buy, buy!
By Caroline York,  Fri Nov 11 2011, 08:00
Often when buying a REO or bank owned property the lender does not tell the buyer all of the costs until the estoppel is completed. If you are buying a condo or a home in a Home Owners Association or Planned Urban Development or that has a land lease you could be told a day before closing that you will have to pay thousands more because of unpaid association fees, condo fees or land rents. Know what you are doing. Hire a good realtor that is detail oriented.
By jeddisons,  Mon Nov 28 2011, 20:45
I research real estate economics constantly. I strongly believe, although there will be some upward bumps, overall there will be a second R.E. burst. The Federal Reserve put into circulation 300% more dollars than was in circulation before the Recession of 2008. This surge in dollars is artificially holding up the stock market and we are living in a 2nd stock market bubble. When foreign investors see the US economy isn't coming around, they will most likely put their money in currency assets other than US dollars. When that happens the dollar will fall more than it already has (more than a 65 plus % drop against the euro since 2000.) The Euro will survive as will the US dollar (both for now), but both will be devalued. With devaluation, currency buys less than it used to (known as inflation.) When inflation exceeds 10% annually ( esp. for a number of years per year,) interest rates will rise and make it harder to qualify for a mortgage. Down goes real estate again, and some sellers won't be able to sell unless they can afford a financial hit. So, dollar devalued, stock market and real estate taking a second pop, and our Congress will have to make drastic changes in fiscal and monetary policy, raise taxes to avoid another possible national debt default, and LEARN SOME ETHICS . We've seen artificially inflated bubbles pop already, but the biggest bubble yet to explode is the national debt crisis. The U.S government currently holds more short term loan debt that many other developed countries combined. You can't roll over debt forever. Sooner or later the fat lady will sing and she will be singing alto for many years to come. Get ready for a tough, tough ride AND be ready to help those who can't help themselves. In twenty years or so, hopefully the faulty foundations that brought on the Recession of 2008 will have been rebuilt. It is up to the public to demand it. Congress has been avoiding its duty to its constituents and the nation for far too long.
By Ann Christopher,  Fri Dec 2 2011, 18:07
As an REO Foreclosure agent, I don't see an end to the supply of Foreclosed homes on the market. The economic recession doesn't look like it will be lifting anytime soon. There are thousands of homes across the country that are a good value. While I will agree that I see a large number of homes that were not maintained and need extensive repairs, there are some really good deals out there. My advice to any buyer is to take your time to find the RIGHT one. Hire a buyer's agent to work on your behalf that is experienced in the foreclosure market. A seasoned professional will know the ins and outs of the foreclosure purchase process from offer to close and how to avoid many of the hurdles and ostacles that frustrate so many buyers trying to navigate such a sell. By making sure you have all the necessary p's and q's in order before making any offers, an experienced agent can expedite the process. My second word of advice is HOME INSPECTION!. If the bank who owns it doesn't want you to do one...walk away and find another home. Once you have your inspection report....take time to consider any necessary repairs and weight the associated costs to determine if you are getting a good deal at a good price...cheap is not always good.

For help with foreclosed and distressed properties in the Upper Cumberland Region of Tennessee....email me Ann.Christopher@Crye-Leike.com I will be happy to help you find what you are looking for!
By Lachase,  Thu Dec 8 2011, 07:56
What about liens against foreclosed properties? How is the best way to track down what is owed against these foreclosures that will be additional costs to the buyers?
By Shawn Rosa,  Tue Dec 13 2011, 11:09
too many homeowners continue to find expensive problems popping up with REOs they have purchased because home inspections simply dont reveal everything. be very careful with foreclosed properties
By .betty Boop,  Fri Jan 6 2012, 22:23
.Arizona-Ad:"Palace On The.Hill" $123,900, I offered $124.100 [house was REO] I was told there were two other ":close" offers and .I needed to make the best offer I could,I offered $9000 more. My offer was accepted, cash only. The closing would be 16 days later, escrow was .$2000 due now.Three days.later I was told the closing would be on the 23rd , then the 29th .and .then the closing .would be on the 4th. Everyone met at an office, I signed the final papers and was told to make a wire transfer at my bank for the balance to their bank,[.same bank., different state,] which I.promptly did. Next day I was told there was a problem at their end no explanation and no one could be reached,no further communication.My realtor told me to wait three days and on Monday,hopefully, we should hear from them. The bank offered to return my money,I told them I will wait until Monday.The loan company involved is and has been the culprit in all the delays.So, here we all are waiting in suspense to find what is going on.."The .Palace On The Hill" is waitng, too..
By trudi_werner,  Mon Feb 13 2012, 06:31
Lots of good information here but now I'm totally scared to purchase a home. I lost my husband and cannot afford to stay in my house because my salary just won't cut it and the bank declined my re-fi so I'm looking to sell, not short sale yet, but want to purchase a home for cash in the meantime so I have a place to live. The foreclosures sure are cheap, but I don't have the funds to fix them up and the timing it takes will push me into a short sale of my own home. It's a vicious cycle. We never missed a payment, we've kept the house up and the only thing we did wrong, not wrong, was that my husband passed away. There is no help for this type of situation and the bank just wants their money, that's it, end of story.
By Adrian Provost,  Mon Feb 27 2012, 17:05
Good information.. Trudi, not all foreclosures are in horrible condition. Get with a reputable real estate agent in your area and come up with a great plan of action.
By Melanie,  Sat Mar 17 2012, 16:01
I disagree with the statement "if a homeowner can not afford the mortgage, they can not afford repairs" In my situation and I'm sure for most, why would I pay a plumber or electrician to come out, if I am not able to stay in the home? My rationale is if the bank wants my home that I have lived in since I was 3 years old let them take it, and let them or the next homeowner deal with the issues. If I could I would take my furnace, water heater, etc.
By Melanie,  Sat Mar 17 2012, 16:48
I disagree with the statement "if a homeowner can not afford the mortgage, they can not afford repairs" In my situation and I'm sure for most, why would I pay a plumber or electrician to come out, if I am not able to stay in the home? My rationale is if the bank wants my home that I have lived in since I was 3 years old let them take it, and let them or the next homeowner deal with the issues. If I could I would take my furnace, water heater, etc.
By Gina Mcglashen,  Tue Apr 10 2012, 11:52
this sounds like way too much trouble and aggravation to deal with foreclosures. You may end up with 10,000 or more dollars worth of aggravation to save less or a bit more.And the idea that the due process involved only needs one glitch in it that causes some illegal event to happen and you may end up losing big time is a real bad news. There needs to be a different approach to selling foreclosed properties that truly only safeguards the bank and protects the seller more than a prospective buyer from losing.
By EY,  Wed Apr 11 2012, 08:56
One IMPORTANT thing to remember is the Lien search.

It's logical that ANYONE that has to go through a foreclosure has outstanding Lien on the equity of their home by another creditor besides the mortgage bank. Basically, assume they've maxed out their credit cards and may have existing home equity loans, so it is possible that you'll have to pay an additional $100k on top of the bargain $300k, bringing your total purchase price well above market value of the home.

Then, there is the possibility that the -now- tenants you're left to evict will trash the house and sell everything they can -including the kitchen sink- and you have no legal recourse to stop them. They can go as far as removing all the copper pipes for scrap, leaving you a gutted home. This of course will ALL need to be replaced which would leave you with another $100k to just bring the house up to par.

In the end, the bargain $300k home you thought you bought becomes a house you paid well above market price for.

Another warning is about the actual bidding process. In the blind bid, we assume the auctioneer is impartial, but not so, their incentive is to coax the most from bidders and will introduce a non-existent higher bid to milk you for more money from the highest bidder. Simple example is... you bid $1000 and you're the one and only bidder, the auctioneer will tell you the highest bid is $1200 and ask you for $1250. If you fall for that, they'll tell you another bid came in for $1500 and ask for $1750. Basically, even though you were the highest bidder, you were milked for an additional 75% -totally legal.

My advice would be, IF it's at auction, why expect to pay more than half for a property you know nothing about and never had the chance to inspect? There are reasons why it wasn't purchase during a short sale.
By Wendels,  Thu Apr 12 2012, 09:54
to Trudi_Werner,
Trudi why don't you try a lease option? or basicially (rent to own) you lease your house for xxx $'s which will pay for a different home, you keep title to the home and in xxx years sell. It is the best of both worlds you will have money coming in to pay for rent or mortgage for another place while still owning your property.
By Svetlana Bachayev,  Sat May 12 2012, 06:22
i am very new at this... and i am getting a lot's of new info.
question... what is short sale??
By Matie,  Mon Jun 4 2012, 08:08
If you're interested in foreclosure, I can advise http://www.indexpost.com/
Free foreclosure listings and foreclosed home search
By Voices Member,  Wed Jul 18 2012, 00:17
We will help you with your Short Sale Solution whether you are a professional or not, we can HELP! Fill up the form and get free Guidance at http://shortsaleinfoca.com/
By abenakimorningdove,  Sat Mar 2 2013, 05:39
if any of you are still in the market of buying, there is agood amonu=t of homes here in Rochester,new Hampshire that I have found.
I am still yet to find a duplex for my family. I am seeking a duplex for my mother, and daughter . their will be 7 people all together.
My mother,and brother will take one unit, and my daughter and her family will take the other. they are willing to pay 775 per a unitl.
If you have or know some one who will be willing to rent , them a building please get back to me at abenakimorningdove@yahoo.com
By Chuck Hulsey,  Thu Jul 11 2013, 15:20
to Oleymisreb I agree they are insects!
By sjuell1,  Mon Jul 22 2013, 08:49
do any of you so called realtors have spell check.
its pretty funny and sad that you can't read your post before posting it.
and why should I have to give my e-mail to post a comment.
By Rodolfo De Hoyos,  Fri Aug 2 2013, 15:59
I can offer investors REO properties in pools at a time. 18 to 30 cents on the dollar. Across the US. We sell pools of properties and never one at a time. If you are serious about getting a high yield on your real estate investments. Contact me at 714-240-0635.

Non performing Notes at 12 to 18 cents on the dollar.

I only require POF and we are off to the races.

Non performing Notes at
By Philly Best,  Mon Aug 26 2013, 20:20
You should always consult with a real estate lawyer
http://www.lawyernortheastphiladelphia.com
By r887766,  Thu Oct 31 2013, 10:26
I had the lawyer do a search & found a 25k lien from a finace company. If I become the new owner of the foreclosed property, wil I b required by NC law to pay the lien? I have no intentions of selling the property ever. Can the finace company foreclose on the property ? The price is right & the lien exp. in 2015.

Leave a comment

POST

7/7 guides | View all

When I was single, I bought my first apartment. It wasn't so unusual: About 20% of homebuyers are single women. Prices were cheap at that time, and my best friend — something of a financial whiz — urged me to do it. I found an agent I could trust, ...

By LearnVest | 1 Comment

Got a real estate question? 

ASK
Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer