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Buying a Foreclosure?

Posted by on Apr. 6, 2013 at 9:36 AM
  • 18 Replies

Can you offer much less than the asking price?  Are foreclosures much better deals than regular homes for sale? Have any of you bought one and what was your experience? TIA!

by on Apr. 6, 2013 at 9:36 AM
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by on Apr. 6, 2013 at 9:55 AM

I have never bought a home.  I'm pretty sure you can ask less, but changes of getting it could be slip because most homes in foreclosure are owned by the bank and the bank wants what is left on the mortgage.

I don't think they are better deals per say.  I think they have their good and bad just like any homes.  Something to watch out is some people will let their home to to wreck if they know it's going to be foreclosed on like not fixing things.

If I were searching I wouldn't count foreclosed homes out.  I would just be aware it is foreclosed, is bank owned in some cases, and price might not go down.  I still would do an inspection, I would still do a couple walk threw.  I would treat it just like a regular home for sale.   

by Silver Member on Apr. 6, 2013 at 10:08 AM
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A foreclosed house is one the bank already owns. You can try to offer less, but "generally", the house is almost at bottom dollar anyway. Sometimes with a foreclosure, you don't know what you're getting until you get the keys. Sometimes an owner hasn't been taking care of it, knowing they were losing it. We had vagrants living in a house two doors down because the owner was being foreclosed on and just walked away. Holes in walls, stolen property, it was disgusting. And, sometimes the bank hires a crew to maintain it - mows the lawn, secures the home - or the actual owner may have cared and just stayed until the very last minute. It all depends because it can vary do greatly.
You need to look at the comps in the area to find out of you are getting a deal. A realtor can help you with numbers.
We've been looking at foreclosures as an option for a rental or our next home. We get lists from a friend every week - drive around, peak through windows, see of the yard is open, ask neighbors who are out mowing lawns and such.
Neighbors will tell you more than a realtor.
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by on Apr. 6, 2013 at 10:11 AM

I was looking at foreclosers in Raleigh NC found a 7 bedroom home for 95,000 it was in SHAMBLES! 

Saw a couple cute 3-4 bedrooms for the same price for short sales too....I think im going to hold off and save up more money 

by Silver Member on Apr. 6, 2013 at 10:13 AM

You can submit less.  See what happens. Depends on how long it's been on the market. A bank might take a lower offer.  Isn't a forclosure house.  Sold as is.  Where you can't bargain for some things be fixed as part of the sale  But you can still get a home inspection.  So you know what is wrong with the house. If anything is at all. 

by on Apr. 6, 2013 at 10:47 AM

We've been looking into this as well.

by Jen on Apr. 6, 2013 at 10:51 AM
We bought a forecloser. It was trashed so we got it for much less than its worth now and had to put a big chunk of work into it.

You can offer whatever you want but id look at how long its been on the market, what needs to be fixed, how bad the bank wants to get rid of it. Buying from the bank can be tricky bc they are less likely to fix things in my experience. They usually just want to unload it, but they dont want to lose money either.

Usually they are better deals, but again, look at comps in the area, how much work it needs, what it was worth before it forclosed etc so you know what ur dealing with

For us it was an amazing deal, we put eight wks of work and about seven thousand into it to make it liveable but it was our first house and we got to make it ours. Im hoping we get lucky on our next house as well. We are hoping to move before dd goes to school in a cpl yrs.
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by on Apr. 6, 2013 at 11:05 AM

I was looking into foreclosures too, but (at least in the Bay Area), most foreclosure need ALOT of work. You can offer whatever you may like, but keep in mind that the bank can also reject your offer if you live in a metropolitan area with a rebounding market. Talking to the neighbors would get you a better idea of the neighborhood than an agent. 

If you do want to get a foreclosure, definately get a house inspector to take a look, because there are many times which the previous owners neglect heavy duty tasks or there may be foundational issues that would require a whole set of permit seeking and expensive work that may negate the point of owning a foreclosure. 

by Adrienne on Apr. 6, 2013 at 11:46 AM

Thanks for the advice so far. Our first home was a foreclosure that the builder couldnt sell and hubby worked for the bank that was selling it so we got an outrageous deal. But we have grown out of it and now he works for a hospital so no houses to be bought there. it's a 3/2/ 1 car garage

We found a house we like, 4/2/2 they are asking 139K and it looks like that's the average price around there, nothing that cheap about it. I wonder if 110 would be reasonable or if they would think im crazy.Then again, we would need to get an inspection first for sure. And I am kinda looking for something 2 story for more space and this is one story and not as big as I would like but one extra bedroom and huge master bath and 2 walk in closets, 2 car garage. It's only been on the market 2 months so far....

It is in a nice neighborhood kept up good, the main damage seems to some of the walls have ugly repair but not sure if they punched holes in them or what? Also horrible paint job and trashed carpets and some missing lighting. And it needs new sinks. (outdated, ugly, filthy and junky)

by on Apr. 6, 2013 at 4:16 PM
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I worked in real estate and I will tell you that you should negotiate and make a lower offer if the house needs repairs. You would be surprised at offers that are really low and they are accepted by the bank. Everyday it is sitting there for sale it is costing the bank money in property taxes and insurance sometimes even association fees if it is in a real nice well kept area. NEVER--give away your money or heard earned dollar so easily! Be frugal !!!!! LOL

When the realtor is ready to write up your offer he/she will try and show you homes in the same neighborhood that have sold and you should not go by that if the house needs any kind of repairs. I always push those comparisons aside and if they want to write up my offer fine and if not there are a lot more realtors with bills to pay that will write up my offer. Remember the higher the house costs the higher the comission a realtor gets!!!! It is a business.  

by Bronze Member on Apr. 7, 2013 at 5:00 AM

Just bought a couple. You can certainly offer less, but not a lot less if you want your offer to be accepted. They are usually priced right by the bank. In California you can make your offer contigent upon an inspection, this is probably true in other states as well. Then you can ask for a discount based on what is found upon inspection, broken items, termites, etc. Sometimes they will agree to a price reduction. It's kind of good to deal with a bank as opposed to a homeowner because they have no emotional attachment to the home and they don't take things personally.

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