Holleyjustice, Home Buyer in Brandon, MS

Where can I get good information on what to look for when buying a foreclosed home?

Asked by Holleyjustice, Brandon, MS Thu Aug 30, 2012

We are going to be moving and are considering buying a foreclosed home at auction. I know they are sold at the local court house 1 day a month. It says that you must have cash. Will a letter from the bank showing we are cleared to buy up to a certain amount do? Do we have the opportunity to go visit the home first and see what it looks like inside and out? How can we check to see if there are any other debts we will be assuming if we purchase the home? What else do we need to know?

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9
Great question. You go to foreclosure.com and they will offer you information.
2 votes Thank Flag Link Fri Aug 31, 2012
We called our agent and she gave us all the information we needed. She also explained the process. Thank you Kriss
Flag Fri Oct 12, 2012
thanks
Flag Mon Sep 17, 2012
Foreclosure auctions are more difficult for most people to deal with because
1. The trustee requires you to pay for your puchase immediately upon winning the auction. You cannot leave the auction, go to a mortgage company and process a loan - it's cash or equivalent only. Bring cashier's checks to pay for your win.
2. The property comes as-is with all its faults - they are your responsibility. Since you won't be able to see inside the property before bidding, you're buying a pig in a poke. Good luck.
3. The property may not be paid off by your purchase. There could be other liens on the property, such as for taxes or other mortgages. Being aware by doing research before bidding is the only safe way.
4. The bank that forecloses will automatically bid the full amount they're owed. So, it's unlikely you'll get a bargain. A short sale before foreclosure would mean the bank receives less than the amount owed - so it's going to be lower priced.

After foreclosure the bank will market the property as a REO (real estate owned by the bank) and will likely be priced at market value. But that's probably below what the auction price was.

Before the auction, as I mentioned, a short sale by the owner will result in a lower price, since it is at or below market and the bank must approve it. You do get a disclosure; unlike after foreclosure.

Talk to a Realtor to get more information.
0 votes Thank Flag Link Sun Sep 9, 2012
Few suggestions you might want to consider

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0 votes Thank Flag Link Fri Aug 31, 2012
You also have the option of bringing a bank statement with you to the auction. Some require two months of bank statements, and others only need the most recent statement. If you're going to sell investment holdings, you'll need to bring your 401(k) statements. Because investment accounts can have fluctuating daily balances, some sellers only accept proof of funds from standard bank accounts. It would be a good idea to find out ahead of time what exactly the seller will require regarding proof of funds.
0 votes Thank Flag Link Fri Aug 31, 2012
In California, you must have cash to purchase at an auction. You can open an escrow account to hold the monies you are allocating for the purchase, which can be verified at the courthouse or where the auction will be held (commonly held at title/escrow companies in Southern California). You will not be able to go inside the home prior to offering on it at auction/trustee's sale. It is still the property of the previous owner up until it officially goes to sale. If you try to enter into the property prior to sale, you are trespassing. This is why so many people decide not to go to the trustee's sale (at least in my area). It is a huge risk and you never know what the inside of the property looks like until after you've bought it. If you take a chance and wait to see if it goes back to the bank, it will be listed as an REO with some inspection rights (usually 7 days). That's a much less riskier way to go. If you show up at the auction and no one else shows up to bid, you should weigh out if the starting bid is a good enough deal to buy the property at that price with possible liens attached or damage to the interior.
0 votes Thank Flag Link Thu Aug 30, 2012
A letter from your bank showing proof of funds should do. Typically on foreclosures you have an exploratory period of about 30 - 45 days after you go under contract to have a home inspector come in and check it all out for you. Foreclosures can be a good investment and other times not. I would like to refer you to an article that I wrote regarding that by clicking on the link below. If you are looking to make a move to Rockwall, you would do well to have a good agent that is familiar with the local market to help you know if you are really getting a good deal. I live and work in Rockwall at one of the most respected and well know agencies around. Please feel free to contact me either by email at DavidRay@Ebby.com or by phone at 214-662-3434 and I will be glad to help.
0 votes Thank Flag Link Thu Aug 30, 2012
Great answer!
Flag Fri Aug 31, 2012
Local county records website have all the local info.
0 votes Thank Flag Link Thu Aug 30, 2012
It's important that you try and identify the property you're interested in a few days before the trustee's sale (in California). This way you are able to request and pay for the preliminary title report upfront and understand if the property is encumbered by multiple liens or is free and clear of any possible liens. Once you show up at the auction/trustee's sale and pay for the property, you are buying the property that could have liens attached, which you would then be responsible for paying off to clear the title.
0 votes Thank Flag Link Thu Aug 30, 2012
Just be very careful. Have a title search done on the property prior to purchasing at the auction.
0 votes Thank Flag Link Thu Aug 30, 2012
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