Foreclosure in Madera>Question Details

Michelle, Home Buyer in Madera, CA

why are some of the prices for foreclosed homes so cheap?

Asked by Michelle, Madera, CA Tue Dec 22, 2009

how do you buy a foreclosed home? what are the catches? they seen so reasonably priced, too good to be true....do you also have to assume the balance of the loan? plus the added price?

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If you are looking at realtytrack listing forget about them. They are not really for sale at the prices they have listed on trulia.

Some are really that cheap in real life. You could be looking at a house that can not be lived in. Some are in bad neighborhoods. Some are best to tear down. Some are actually a good deal.

If you want to find out more about foreclosures and how to find them look here.
http://www.trulia.com/blog/dan_chase/2010/01/i_am_wanting_to…

Also, any real estate agent can help you to find foreclosures in you area and explain all about them.
0 votes Thank Flag Link Wed Feb 17, 2010
A home which has been foreclosed upon by the bank and then listed often is priced low due to the condition of the home. Some of them have had appliances removed or were in the middle of a remodel (with work often by the previous homeowner) and will thus require significant expenditures to return the home to a livable condition. If the home is owned by the bank, your escrow process will allow you to have clear title to the home, as well as whatever inspections and reports you wish to purchase; repairs will be up to you, after close of escrow.

If you are talking about Trustee's Sales, which are homes in foreclosure, the banks are requesting payment for the amount due them on the loan plus additional allowable expenses. You would assume any unpaid property taxes and potentially other liens on the property; you'll need a Preliminary Title Report to let you know what these other liens and their monetary amounts would be. If it is the 'junior' lien which is conducting the foreclosure sale, then the 'senior' lien (first trust deed) still remains in place -- and, yes, you would assume the balance of that loan, its delinquencies and related fees, and monthly payment, in addition to 'buying out' the junior lienholder at the Trustee's Sale. Same-day payment (cash equivalent) is required for Trustee's Sale purchases (i.e., Cashier's Check) -- so you cannot bid and expect to have 30 days to obtain a loan.

If a property is on the market and a Trustee's Sale has been scheduled, you can still make an offer to purchase the home, with your offer contingent upon obtaining a loan to buy the property. You'll get clear title and have less competition for the home, too.
0 votes Thank Flag Link Wed Feb 17, 2010
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