Foreclosure in Fort Wayne>Question Details

Yvonne, Home Buyer in Indiana

what do I need to think about when purchasing a Forclosed house?

Asked by Yvonne, Indiana Tue Nov 20, 2007

I am looking at a house 4 bedrooms 2 baths but it has been foreclosed on. What kinds of things should I ask? Or need to know. Thank you!

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Foreclosures can be a great opportunity to purchase a home well below market. First and foremost do your research. Many of those going into foreclosure are foreclosing because they financed their homes for more than market value; therefore, they could not sell their homes or refinance and were forced into foreclosure. Although much of the US is experiencing a down market for sellers and a strong buyers market, some mortgage institutions have not been realistic with pricing the foreclosures where they should. This has resulted in more foreclosure listings in the MLS than foreclosures being sold at the county steps. Do your homework to ensure that the foreclosure is well below market. Know that those who could not afford to keep their homes typically could not afford to upkeep their homes so be prepared to make some repairs and cosmetic changes. In many cases those being foreclosed upon take all the appliances and even rip up floor coverings.

Do your research on any liens placed on the property. Many counties have placed property records online. If records are not available online then you will want to take the drive. If you are purchasing a listed foreclosure then the attorneys office that is handling the closing will order a title search and you would want to purchase and owners title coverage policy which will protect you from any liens prior to your ownership.
5 votes Thank Flag Link Tue Nov 20, 2007
Yvonne, You had better check with your state to see what type of instrument you have: either a mortgage or trust deed. They differ in the foreclosure process and have different remedies for the foreclosed party. When consumers say a "foreclosed on" property they sometimes mistake a property "taken back" by the bank with a Notice of Default (NOD) filling. Do you know which it is?
Buying a propery "off the courtsteps" is NOT for the faint of heart!! Big bucks can be made AND lost through this buying process--and you are ON YOUR OWN! Most consumer laws in real estate protect a Seller/Buyer in the 1-4 units range but foreclosures are exempt. Don't expect the bank to tell you anything! No disclosures will be forthcoming and you are on your own! IRS lien pops up and you are ON THE HOOK. Careful-tread lightly.
2 votes Thank Flag Link Wed Nov 21, 2007
To best protect yourself make sure that you put in the contract that you have the right to have an inspection and finally MAKE SURE YOU DO!
0 votes Thank Flag Link Wed Jan 16, 2008
Unfortuantely for the housing market, we have a ton of great deals in Indiana on foreclosed properties right now. I'm taking that you mean foreclosed as a bank owned property or HUD home. You are buying them "AS IS" but you have the right to have them inspected first.
0 votes Thank Flag Link Fri Nov 23, 2007
I would only buy a pre-forclosure if:

1- They had sufficient equity to drop the price below current value to give me a great deal.

or

2- If they had no eqiuty, they at lest had a competent agent or negotiator working with the lender to get my offer accept for less than what is owed on the property (short sale).

Most agents do not have the knowledge or experience to deal with short sales, thus the 10% successful close ratio on a national average. With an offer within 15% of current market value, I can close 80% of the short sales I list.

Again, make sure the 'listing agent' is competent in negotiating. The buyer's agent that claims to be a short sale or preforclosure expert and just shows you homes for sale (not their own listings) always cracks me up. The listing agent is the one that needs to be the expert, the buyer's agent sits back and waits for the deal to get accepted.

Happy house hunting.
Web Reference: http://www.opproperties.com
0 votes Thank Flag Link Wed Nov 21, 2007
Foreclosures are not always the best deals on the market. Are you specifiacally looking for a foreclosure or a good deal? Be sure to invest in inspections.....forclosures are sold "as is" and you need to protect your investment. Good luck!
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Tue Nov 20, 2007
Cindi Hagley, Real Estate Pro in San Ramon, CA
MVP'08
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