Several people have good answers here. You run a great risk of still overpaying for the home if you don't run some good comps on it first. One way to avoid overpaying by having an agent run the comps and then advise you on which homes would be the better deal. Using a buyer's agent does not cost you any money since their pay comes from the seller's proceeds. That way you can have someone looking out for your best interest.

Why would you do that? Most likely the home is worth less than they owe.

avoid the risk! The advise to purchase a new build home is good, I've found Buyers some great ones lately with fantastic financing(4/7/8% fix 30 years!)..........all extras free, new already built spec home.

John

Hey I just moved to Phoenix @ months ago, The market is so slow you can easily get a brand new house for the same price banks are trying to short sale for. I bought a new home way below asking and got excellent financing and seller came to table with my closing cost, Come a look and u will see!!! Dont settle for someone else's stuff get your own. WELCOME to the AZ

yOU cAN TAKE OVER MY PAYMENTS! I HAVE ALREADY REDUCED IT UNDER 125000 LESS THAN I PAID 2 YEARS AGO.IT'S A BEAUTIFUL CUSTOM ON ACREAGE IN NORTH PHOENIX!
Diane_roeper@yahoo.com

Sb,
Most of the information given here is correct - offering to take over someone's note and make up the back payments could be a risky move. It's unfortunate, but sellers 'in distress' are not in the best position to make huge life changing decisions, and they may leave some information out. You could get half way through the sale and realize there are defaulted taxes, HOA payments, liens, way more than you ever anticipated. If you are looking for a home to live in, but you don't want to pay too high a price, there are plenty of homes for sale that have been cared for by the owner, but are still a good price. You may want to look for a fixer upper; it might not be labeled as such, but something that has a dated kitchen and flooring could be a great deal in this market.

Good Luck! Send me a private email if you want more info.

The due on sale clause is optional is it not...At the rate banks are foreclosing do you really think they will foreclose on an asset that is performing...IMO it's easier to accept the money than go through the hassle of foreclosing.

Jeni I was just recently in that area...if it's where I think that's a horrible neighborhood...someone else sent to a house near there great homes if they were built recently but after that the rest are horrible...

Most conventional promissory notes have a "DUE ON SALE" clause. The transfer of title for consideration of paying the back payments would be consider a sale in which case the note would be called due. There are so many bargains to be found in Arizona you are better to take on a clean transaction.

we have a house here in Phoenix that they are thinking about selling-we are not in foreclosure and there are no strings attached to us or our home, we are simply moving into my father-in-laws home. Our home is northwest of Thunderbird-very nice-and nice neighborhood. If you are interested, please email me back.

Personally I would stay away from short sale or forclosure properties. Yes you can get a by sometimes but it takes on an average 4 to 8 weeks to hear back from the lenders if they are going to accept your offer or not! Many times they do not. With price's on the downward move you can purchase a home not in forclosure at a great price. Most Sellers are batteling the bank owned and foreclosure properties.
They know that they must lower their price to get them sold. They have taken care of their property which you do not find very often on the bank owned or foreclosure Market. I would not recomend taking over someones back payments. First off if they are behind it is because they are on a adjustable mnortage and can no long afford the payment. Second if they are behind they are having additional interest add to their monthly payment. Third most loans have a "due on sale clause" which if and when they found out they could foreclose on the loan. Not a great idea. But if you still want to pursue these home make sure you find a realtor who has experience in this field. They will save you money and time.

With prices down, lots of motivated sellers and interest rates below 6% FIXED you have no advantage paying someones back payments and taking over their loan (which you probably can't do as almost all loans from motgage lenders are"due on sale".) You would be better served if you found a realtor who specializes in the area in which you would like to live and let that realtor guide you to the best values.

Some homeowners that are loosing their homes bought their houses when prices were high, some loans adjusted, some took out equity, can't make the payment for x reasons, etc. Prices have come down, making it more affordable for many first time buyers. Short sales and Bank Owned are every where.
Seek legal advice if you plan to persue it. If you make a move keep in mind location, price and condition. What part of Arizona are you movingt to?

Your idea has merit. The difficulty is finding a loan that is assumable. Assumable loans are rare these days. I would suggest, if you pursue this option, that you retain a good attorney who can review the loan documents on candidate homes and secure, in writing, an agreement from the lender that they would accept your assumption.

I would also suggest you develop a relationship with a professional Realtor who experience and knowledge will help you achieve the goals you have set for this investment.

Sb,

The most likely pitfall is that the reason many people are loosing their homes in the Phoenix area is not because they've lost a job ... it's because their adjustable rate mortgage has caused their payments to skyrocket higher and more than they can afford. The double-edged sword is that while their payments go higher their home values have nosedived and as a result they owe more than the home's market value.

So, there is a much better chance you'd be taking over a mortgage that has payments that are much higher than they could be than if you purchased a home at market value or one of the many foreclosures out there.

Of course, there are always exceptions to the many rules out there. If your goal is to rent-to-own there are many viable options out there that make more sense. If your goal is to purchase way below market value than move towards a home that is already in foreclosure or in a short sale or bank owned...

Good luck!