Should I seekmy first home through actions?

Asked by Sophiaolga, Los Angeles, CA Sat Oct 1, 2011

I am a single mom and first time buyer .My credit is close to 600 but I have cash. I am not sure if the bank will finance me even if I put 30-40% down. Can I get a house in action if I pay $ 50,000-60,000 owed to lender?WIll I get the title same day? And is it safe and trustworthy to do it this way?

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John Arendsen’s answer
John Arendsen, Agent, Leucadia, CA
Sun Oct 2, 2011
If you're not a seasoned RE investor or a licensed RE professional please do yourself a big favor and heed the advice you've received so far. The few bucks you spend on the commission will save you hours, if not days, of pain and aggravation.
0 votes
Sonsie Conroy, Agent, San Luis Obispo, CA
Sat Oct 1, 2011
Please believe the advice you've gotten so far. Auctions are not for newcomers for all the reasons listed. Finding out if you even qualify for a loan is your first step, and doesn't cost you a thing. For whatever reason, many buyers think auctions offer terrific bargains (where in L.A. can you get a house for $50,000, auction or not?), but as Richard points out, the savings is only in the range of 20% or so, and you get no chance to investigate the property in advance.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sat Oct 1, 2011
Auctions are very risky propositions. You get limited or no access to them in advance, no inspection and no seller's disclosure. You are buying blind.
Auctions require buyers to pay cash, but there are lenders who set up short term loans for investors. The investors typically have good credit and enough money to fix up the homes and re-sell them.
If you really want to buy a home your first step will be to meet with a lender and find out if you qualify and how much you can afford. Based on your other questions, you are a full time student. Unless you have a regular job, it will be difficult for a lender to approve you.
Talk to a local lender and find out exactly what your options are. Best of luck.
0 votes
Brian Fisk, Agent, Studio City, CA
Sat Oct 1, 2011
Richard is right. Buying at an auction is a dangerous way to buy your first home. You don't have the opportunity to arrange for professional inspections. If you discover something's wrong with the property there's no way to get out of the purchase. And as Richard said, you don't get "steals" at an auction. In fact I've seen bidders get carried away and house sold above market price.
Better to take your time and make sure you get the place you really want with no surprises!
-Brian (818-780-3456)
0 votes
Eric J Soder…, , Pleasanton, CA
Sat Oct 1, 2011
Richard is right. Also, there is huge risks in buying a home at an auction. I don not recomend doing it yourself. This should be left to the experieced buyer that can afford to make mistakes. If you have cash, use a realtor and have them search the MLS. You can save 15% or there about if you pay cash.

A lender will not sell you a home for what is owed to them. They will sell it for market price.

Best Regards,

Eric Soderlund
0 votes
Richard Schu…, Agent, Los Angeles, CA
Sat Oct 1, 2011
Where do you expect to buy a property for that price? Its a big misconception that properties sell for huge discounts at auction. At most auctions, you might get a 20% discount on price, but you inherit any tenants/occipants, liens and you have no ability to inspect the property. Very dangerous for a first time buyer.

Richard Schulman
0 votes
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