If we buy a house in foreclosure do we not get loans from the bank? Do we have to pay the total price of the house by cash or check??

Asked by Aaroohii, 08901 Fri Jan 29, 2010

I live in central nj and was told by my friends that in foreclosures this is what happens, somehow I can't believe anyone would have more than $100,000 to give in cash or check.. than how do ppl buy foreclosures?

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I Lee Dickst…, Agent, Yardley, PA
Sat Jan 30, 2010
As you can see from the answers you have received, there are a lot of circumstances to each transaction. The biggest realization buyers have is that they are buying 2 things, a property, and financing. A real estate professional can help you sort out which properties match up with your financial position. Seek a trusted professional to review your situation. There is no one single answer for everyone.
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Diane Glander, Agent, Spring Lake, NJ
Sat Jan 30, 2010
AT a sheriffs auction, you will need cash. If the house doesn't sell at auction, it becomes REO.
Once it's bank owned (REO) you have the chance to finance with a mortgage. Buying a foreclosure presents a few other problems, too. You won't be able to inspect, and in NJ, the prior owners have a 10 day period within which they can buy the house back.
If you have any other questions, or would like a list of REO homes for sale on the MLS, just contact me through Trulia or my website, below.
Web Reference:  http://www.dianeglander.com
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Elaine D. St…, , Brooklyn, NY
Fri Jan 29, 2010
Hi Aaroohii

If you are buying an REO (bank owned property) listed with the realtor for sale, you can get a mortgage. I second the information in the answer from Cooper Ford. When buying these types of properties you should consider an FHA 203K renovation loan. Do not believe the hype about these loans taking longer or being more difficult to manage.
I have been a renovation loan specialist for over 10yrs in NY & NJ, I would be happy to consult you on the loan process you like.

Elaine D. Stroman Phone: 917-873-5611 / email: estroman@cccmtg.com
Sr. Mortgage Consultant
& Renovation Specialist
Continental Home Loans
175 Pine Lawn ste 100
Melville, NY 11747
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Randi Tirado…, Agent, North Brunswick, NJ
Fri Jan 29, 2010
Hi Aaroohii -

In New Jersey, during a Sheriff Sale (which is an auction), you're expected to pay for it outright. Once the bank owns the property and lists it for sale with a Realtor, then standard mortgage criteria apply. The big difference is that generally speaking, banks will not fix problems with the house. However, you can use a renovation mortgage (such as the 203k) to take care of these issues, upgrade the house how you want, and save a lot of money in the process. If you're interested in any houses in the area, or in the 203k program, please give me a call or email me. Also, visit http://www.the203kconnection.com for more info on the 203k program.


Cooper Ford
Gloria Zastko Realtors
Office: 732-297-0600
Cell: 609-865-5877
Web Reference:  http://www.jerseycoop.com
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Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Fri Jan 29, 2010
This is why people should not get advice from friends, because they get wrong advice. James has given you a good answer here. However, there are certain times when it is difficult to get your offer accepted on a bank owned property, or when you will have a problem with the lender. In New Jersey, as many other areas, the utilities will be turned off, especially at this time of year. Often a bank will not let you close unless you have the utilities turned back on to make sure they are all in working order. This is one of the reasons why banks might accept a lower offer from an all cash investor, rather than accepting your offer. Foreclosures are not necessarily the bargain that they appear to be at the outset.
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James Gordon…, Agent, Hamilton, OH
Fri Jan 29, 2010
Aaroohii depending on your definition there are diferent stages of forclosure. If you are talking about buying at the auction then cash is what you need. It is hard to get a loan where you can not gain interior access to the property. If you are talking about buying a forclosed lender owned home there are loans available to purchase them. Some types of financing may not be available because of the current condition of the property.
Web Reference:  http://www.Find1Home.com
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Al Akerman, Mortgage Broker Or Lender, Lakewood, NJ
Fri Jan 29, 2010
You can get a loan just like with any other home.

A foreclosed home just means that the bank owns it. If you are getting a mortgage then the bank would want to see that you are pre-qualified by a lender for a mortgage.

Good luck.
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Kathleen Lor…, Agent, Baxter, MN
Fri Jan 29, 2010
Typically most foreclosure (REO) properties are purchased with loans. Investors may pay cash but typically they use other people's money to make more money.
In some area such as mine in the Brainerd Lakes area of Minnesota - there are grants available to help with down payments and closing costs if you are buying a REO or a Short Sale. Buyers do go through a class and need to be qualified for this.
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Dana Tippit, Agent, Chesterfield, MO
Fri Jan 29, 2010
Check with your lender and a local real estate agent for the most accurate information. However, I don't know of any rule that you have to pay cash for foreclosures. Many are financed.

You will want to make your contract as strong as possible to get the property in a multiple contract situation, or something you really want. A cash offer is stronger than one that is contingent on financing. Normally, cash buyers can get a lower price because the offer is considered more solid. You could still get financing and waive the financing contingency; to make a stronger offer.

Foreclosures/preforeclosures are tricky. You will need an experienced agent to guide you through the process. Do not sell your current residence until you are certain the deal is closing. NearlyIf the seller still owns the house, at any time, the he can go back to the bank and make loan restitiution and your offer is out the door. Make sure the bank already owns the house.

Best of luck.
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Trafford Hill, , 27915
Fri Jan 29, 2010
If you are buying a home out of foreclosure you can receive financing from a bank. You will still have to qualify for the loan. If you can pay cash it does make the process easier. You will have to be very patience foreclosures can take a long time to work through but can be worth it in the end.
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Anna M Brocco, Agent, Williston Park, NY
Fri Jan 29, 2010
If you don't have an agent now is the time to consider using the services--What you should do first is visit with any qualified loan officer(s) and see what your budget can handle and check that credit score--if you do qualify for a mortgage ask for a mortgage pre-approval letter--then go shopping with an agent and stay within your budget--you need to be aware of recently sold similar properties in the immediate area to determine a fair offer--the bank decides to accept, reject or counter offer--your agent will be your best guide.
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Michael Mulv…, Agent, Severna Park, MD
Fri Jan 29, 2010
You can buy a foreclosure via cash, loan (FHA, VA, or conventional), or a renovation/rehab loan (whether conventional or FHA).

All the best!

Michael Mulvey, U.S. Army (Retired), Full-time Realtor
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