Question Details

C.c., Home Buyer in Dallas, TX

does buying a foreclosure mean i need cash on hand? whats the diff. in buying a foreclosed vs. a bank owned

Asked by C.c., Dallas, TX Fri Apr 18, 2008

home? i thought either way, if one defaulted on loan, it belonged to the bank once again...(don't get it) thought they were one in the same basically..

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Buying a foreclosure doesn't mean that you will need cash necessarily. A foreclosure means that the owners didn't pay the mortgage and the lender, which could be a bank, a government entity (HUD or VA) or an individual if it's owner financed, foreclosed on them and took the house back.

The lender in turn put the house on the market, usually after many months, the bureaucracy kills me when I think on how slow it takes them to process a house and put it back on the market. I've seen homes stay empty for years before the banks get to them and put them on the market.

Sometimes, depending on the neighborhood, the homes get vandalized because it was empty for a long time. Sometimes not. There is one house in my neighborhood where a buyer died a few days after she bought it but didn't even move in, she didn't have a will or surviving family. It's been empty for about 18 months, but we have a very vigilant HOA and they keep up the yard. Just waiting for it to get listed, whenever they get to it.

So that said, depending on the condition of the house, you will probably need some cash to fix it anyway. There is always the exception.
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