Home Buying in Bellevue>Question Details

Catherine He…, Home Buyer in 98052

How do you buy a foreclosure home?

Asked by Catherine Henry, 98052 Mon Feb 23, 2009

Can you view and get a home inspection on a foreclosure home? How do the public auctions work and can you put in an offer before the auction? What is the estimated bid amount? Are there any catches to buying a foreclosure?

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8
Hi Catherine,

I always recommend my clients to look for short sales or foreclosed homes not, pre-foreclosures.

For your information, you could search Short Sales and Foreclosures at http://www.ShortSaleHomeExpert.com. You can search, narrow it down, and save the results.

- MAX
0 votes Thank Flag Link Tue Sep 21, 2010
Catherine

Our staff would be happy to go over the process involved in either buying a pre-foreclosed home (usually a short sale), a home at auction or a REO home. We are experienced in all aspects of home purchasing and negotiations with lenders.
visit our blog - http://www.foreclosurediscovered.com
0 votes Thank Flag Link Wed Mar 11, 2009
Short answer - if you don't have enough cash to buy the home outright, you need to look for bank-owned homes on the MLS. Foreclosure auctions virtually always require cash purchases. Research bank-owned / REO (Real Estate Owned) listings and buy one. The banks really want to offload these homes, they're usually priced well.
0 votes Thank Flag Link Tue Feb 24, 2009
If you do decide to purchase a foreclosed home and find one that you like, be very sure to get a home inspection and possibly other types of inspections such as a sewerline scope and mold inspection. Foreclosed homes tend to have more problems than the average home due to being left vacant and also due to sabatoge and vandalism to these types of properties. I do not do inspections in your area but I suggest that you look on the American Society of Home Inspectors website to find a qualified inspector
Web Reference: http://www.ashi.org
0 votes Thank Flag Link Tue Feb 24, 2009
Greetings. Buying foreclosured homes is not for everyone, and the process is really for the wise. There are many risks. When someone says Jeanmarie I want to buy a foreclosed property, the first thing I do is send them to the courthouse and witness an honest to goodness sheriff's sale on the steps..It is an education. All foreclosures are public record so you can go into any of our county websites and locate the notices of foreclosure. You than can drive by and see the home. It is truely not for everyone, and the biggest reason most people dont buy it at the sheriff's sale is it requires cash. So how do people pick up these great deals. There are ways to buy a distressed property with much less risk for you the buyer. Propertys that have already been returned to the bank is a much smarter way to buy and if the property is in really bad shape the bank "sometimes" not always will address the issues, plus depending on the bank , some of our local lenders here offer amazing lending packages with rate buydowns and no fees. Short sales are great options but you have less guarantees and you must be patient.. There are people out there who just specialize in buying foreclosures and they spend hours studying the property, location and return on investment dollars.
My adivice. Get a good agent, the cost of working with one is already built into the cost of sale by the bank, and those costs are almost nothing in terms of the overall cost of the home, and with solid advice incalcuable. Best of luck, heres my contact information.,425-750-7855
0 votes Thank Flag Link Tue Feb 24, 2009
HI Catherine,
A great way to find investors that find these deals for you or investment brokerages is to go into Google and type in "Buy Foreclosures YOUR CITY, STATE" and you will be able to get businesses that focus on these deals. Be wary of the aggregate websites that are a summary of REO (bank owned) listings. Sometimes you can find a deal there but a lot of times they are highly leveraged. It really depends on which part of the country you are in. The best deals in my area in NC are pre-foreclosure and in a short sale situation but for instance in parts of Michigan REO's are being sold at 20 cents on the dollar.
0 votes Thank Flag Link Mon Feb 23, 2009
Catherine,
I'm not sure whether you mean a home that is being foreclosed by the lender or a home that is already foreclosed. Buying a foreclosed home is much like buying any house on the market except the buyer has the extra burden to investigate and thoroughly research the prospects. It is likely you will get little if any disclosure information. And there can be difficulties for your agent regarding certain government required documents if the trustee is uncooperative. Your inspection process is generally a 'take it or leave it' situation. Buying a home facing foreclosure is going to be a 'short-sale' situation (or pre-foreclosure). These are much trickier because the sale price, foreclosure date and closing date are all subject to change. So be prepared to wait it out and even then you may not be rewarded. You might receive better disclosure information because the owner is likely involved. In either situation, you must be ready to walk if the circumstances just don't pan out. It's not an easy road to follow. The final situation you might be talking about is actually buying the house when it is being auctioned on the court house steps. (And that's literally where it takes place.) Not only do many homes in threat of foreclosure often get reprieves or delays but you're also competing with 'professional' parties that specialize in foreclosures. If this is the path you wander, you will need a cashier's check for $5K and up depending on the home's value. You will also need to be pre-approved and ready to close within 30 days. All of your research needs to be done up front. Unlike a 'short-sale' of even a bank owned (REO) situation where you generally have an opportunity to conduct an inspection, the auction buyer is risking their deposit and accepting the property 'as is'. Yes, there may be an opportunity to grab a deal but it's a high risk game. Good luck with your decision.
Steve
0 votes Thank Flag Link Mon Feb 23, 2009
hello Catherine,
If you were buying in Las Vegas chances are that's what you would be buying a foreclosure. Yes, you will have an inspection done and if you are not satisfied with the results you should be able to back out of the deal or least try to negotiate with the bank on a repair amount that fits what your happy with.

Auctions are a little trickly, only about 50% of homes that look like they were sold actually close sale. Banks have a lot of restrictions on the price of the home. so let's say you go into the bid and win the bid it still doesn't guarantee the bank will accept the bid. I know it sounds strange but it's how it works.

The catches to buying a foreclosure is that you will not received sellers real property disclousures thatt may state issues the house had and far as plumbing,electrical and just about anything that could have gone wrong with the house when the previous owners had it. I hope this informaiton helps you. Enjoy your evening. Penny
Web Reference: http://PennysProperties.com
0 votes Thank Flag Link Mon Feb 23, 2009
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