Has anyone (in the U.S.) bought a foreclosure recently???

[Vito]

Hi,
The great thing about THIS Forum,
is there are alot of brilliant people here,
who come from all walks of life.
Different Jobs, Education, Backgrounds, Hobby's, etc.

I have a goofy question.

I am interested in a Foreclosure Property in my neighborhood.
It is a house that has a $278,000
judgement on it. It is or at least was a $350,000 house.
I just read the auction date for this house in the paper.
I am interested in buying it.
Of course not for the judgement price...
The houses in the neighborhood haven't sold for over
250,000 in the last year due to the current market, of course.

My question to anybody who HAS bought a foreclosed property...
Could you actually walk away with a property for 1/3
of the judgement value...1/2...???
Won't the bank want to cut their losses,
and have their OWN bidder at the auction, to make sure that a house
that has a $278,000 debt does not get sold for $100,000???

I have never done this before,
and am just curious since I dont want to waste anyones time.
I honestly wouldn't go much higher that $175,000
with the current Market conditions.
I just don't have any idea if that is even remotely possible.

Thanx

 

[holyroller]

Usually the banks just want to get the max price they can, but I doubt they would attend the auction to bid the price up.

It is possible that prices could drop further and the fact that credit is so hard to get these days will only push them down.

Also if no houses have been selling for more than $250k in the area, then the market price is not $350k. In fact the market price will be the price it sells for. If you can afford to go up to $175k and are happy with that price, go for it. Worse that can happen is you get out bid.

I don't know the area or the house, but aiming to pay $125-$175k in the current market sounds reasonable.

Im not based in US, but have looked on internet at some of the auctions and prices in some areas at the foreclosed auctions are ridiculously cheap.

Good luck.

 

[Vito]

Thx HolyRoller,

Yes, You're right...If houses haven't sold for $350k then it is not worth that.
I guess when I was referring to THAT price, I was remembering the old days (a couple of years ago) lol
This house is one of the nicest in the neighborhood, and that is what it WOULD have been worth, back then...lol
Different Story now though.

I just really would think that the bank would have their own rep there, or they could potentially lose...everything!
What if they only got one bid?
If there is nobody there...Shoot, I'll offer $20,000!!!
There would have to be a reserve...or so I would think???

Thx for your reply!
By the way, You have some great names in your sig!
Old School, huh?
Rock n Roll Brother!

 

[holyroller]

They may well have a reserve, although having said that. I have seen some articles of houses selling for $x,xxx. In fact in detroit there have been houses selling for $100.

If no one else bids, perhaps you will get a bargain, who knows. Sometimes the auctioneer will not let the house sell below a certain price. They will drop it so much, then it will go unsold, which is happening at a lot of auctions.

Thanks about my domains, lol. I have a few music, rock type domains, I enjoy developing them.

Thx HolyRoller,

Yes, You're right...If houses haven't sold for $350k then it is not worth that.
I guess when I was referring to THAT price, I was remembering the old days (a couple of years ago) lol
This house is one of the nicest in the neighborhood, and that is what it WOULD have been worth, back then...lol
Different Story now though.

I just really would think that the bank would have their own rep there, or they could potentially lose...everything!
What if they only got one bid?
If there is nobody there...Shoot, I'll offer $20,000!!!
There would have to be a reserve...or so I would think???

Thx for your reply!
By the way, You have some great names in your sig!
Old School, huh?
Rock n Roll Brother!

 

[Vito]

They may well have a reserve, although having said that. I have seen some articles of houses selling for $x,xxx. In fact in detroit there have been houses selling for $100.

If no one else bids, perhaps you will get a bargain, who knows. Sometimes the auctioneer will not let the house sell below a certain price. They will drop it so much, then it will go unsold, which is happening at a lot of auctions.

Thanks about my domains, lol. I have a few music, rock type domains, I enjoy developing them.

OMFG!!!

$100 ???!!!

Wow, Truly Unbelievable!
Well, I am definitely going to go just for the experience, at least.

and as for the music domains...
I have a bunch also!
If you want to develop any of mine,
you can have all of the revenue!
lol

 

[yandig]

I have also seen the articles of houses selling at less than $1,000. In most cases, I think they are total renovations required. They also seem to be exclusively in big cities from what I've seen. It will be interesting to see if this becomes more common. It certainly won't help house prices climb back up.

Here's a link to a recent post about these cheeeep houses.
http://goldismoney.info/forums/showthread.php?t=337833

 

[Vito]

I have also seen the articles of houses selling at less than $1,000. In most cases, I think they are total renovations required. They also seem to be exclusively in big cities from what I've seen. It will be interesting to see if this becomes more common. It certainly won't help house prices climb back up.

Truly Unbelievable...$1000...lol

What happened to the Government Bank Bailout???
What happened to that $350,000,000???
Where did that go?
I know it went to the banks, but wtf did THEY do with it?
It was suppose to help out with all of these foreclosures!
Now people are getting kicked out of houses,
so they are taking EVERYTHING out.
A/C Units, Fridges, Washer/Dryers, Furnaces, Fixtures, Heaters, Garage Door Openers, etc. etc...
I almost dont blame them.
but the thing that really sucks, is we are not allowed to go in the house, and have to bid on the house...AS IS.

Well something has to change fast.
Til then, Hopefully we can get some killer deals!

 

[holyroller]

Truly Unbelievable...$1000...lol

What happened to the Government Bank Bailout???
What happened to that $350,000,000???
Where did that go?
I know it went to the banks, but wtf did THEY do with it?
It was suppose to help out with all of these foreclosures!

The bailout is more like $5 trillion now. Also it wasn't to help people with foreclosure. It was mearly to help banks and financials.

Basically a transfer of wealth from the public to the financials/banks, etc..

Its a big joke and it won't work, just make the average joe poorer.

 

[mhdoc]

Nothing is ever that easy. I know a few people who have been buying foreclosures on the courthouse steps for years and while they get some good deals they earn them. A few thoughts.

Detroit apparently has rules about how these houses have to be brought up to code by licensed contractors. Your $1,000 could well require 50,000 or more in repairs (cash) before it could be sold or rented.

The lender will have someone there to bid in at the outstanding first lien balance.

You may or may not have been able to get inside to inspect the property before the sale.

You have to pay cash within hours of the sale. You can't bid and then apply for a loan.

You are on your own for title and survey problems which can be serious. Research the term "Redemption Rights."

Most of the homes will need extensive renovation.

If it still sounds interesting, attend some of the auctions and make notes of who bids, who buys, etc. Talk to them after the sale and see what you can learn. Maybe offer your services free or cheap to help with cleanup/fixup etc. Find a mentor in other words.

 

[holyroller]

You have to pay cash within hours of the sale. You can't bid and then apply for a loan.

At a minimum you have to put down a substantial cash deposit and in many cases you won't be able to get a loan or mortgage on the property.

Also in some cases, moving into a foreclosed home can affect your credit rating negatively.

 

[Vito]

The lender will have someone there to bid in at the outstanding first lien balance.

Ok, That is what I thought...
So if the judgement is $278k, then that is where the Bank rep will start their bid???
Hence, The Reserve...

You are on your own for title and survey problems which can be serious. Research the term "Redemption Rights."

I will definitely research this term.

I know that in some states, the homeowner is allowed to stay in the house for many days after the actual auction.
That could only...Be BAD! lol
As there IS a homeowner in there right now.

At a minimum you have to put down a substantial cash deposit and in many cases you won't be able to get a loan or mortgage on the property.

Also in some cases, moving into a foreclosed home can affect your credit rating negatively.

Here is a copy of the sales terms...

Sale terms: 25% down by certified funds, balance within 24 hours, by certified funds. No refunds. The property will NOT be open for inspection. Upon payment in full of the amount bid, the purchaser will receive a Certificate of Sale which will entitle the purchaser to a Deed to the premises after confirmation of the sale.

 

[mhdoc]

Sale terms: 25% down by certified funds, balance within 24 hours, by certified funds. No refunds. The property will NOT be open for inspection. Upon payment in full of the amount bid, the purchaser will receive a Certificate of Sale which will entitle the purchaser to a Deed to the premises after confirmation of the sale.

That doesn't sound like courthouse steps sales terms. What kind of Deed? Quit Claim or Warranty? I would certainly want to take a careful look at the requirements on a title binder before I paid anyone anything.

The nice thing about waiting until the foreclosure is complete and you are buying from the bank is the title and other issues have been cleaned up by the foreclosure process. Lots more risk with pre-foreclosures.

 

[Vito]

That doesn't sound like courthouse steps sales terms. What kind of Deed? Quit Claim or Warranty? I would certainly want to take a careful look at the requirements on a title binder before I paid anyone anything.

The nice thing about waiting until the foreclosure is complete and you are buying from the bank is the title and other issues have been cleaned up by the foreclosure process. Lots more risk with pre-foreclosures.

Hey mhdoc,
This auction is being held at a local Attorney's office.
I dont know if that makes a difference.
You said courthouse...
This is just an office.

It sounds like I should do a little more homework before handing over any money. I knew it wasn't going to be as easy as it sounded. and I just heard that Barack Obama said in a recent speech, that he was going to put a 60 day moratorium on all foreclosures as one of his first orders of business.
Tommorow is his first day in office.
I wonder if that will come into effect, and when???