Questions on buying Foreclosures - Anyone ever done it?

scott324 · #1 03/19/2007, 08:59 PM

I am interested in possibly buying a property that has been foreclosed. I am looking for the dos and don'ts and any tips you may have. Is it normally ok to try and view the house before you bid or is it sight unseen? If you can view the house does that mean inside and out - exactly what kind of access can you get? Also, is possible to get financing for a foreclosed house. If I have enough to put down the downpayment at auction, can I then go get financing or to I have to have the entire amount up front?

Thanks and please add any other info you see fit.

Sk8r · #2 03/19/2007, 11:48 PM

I once bought a gov't repo, which was a great deal: I bought at 14,000 and sold it for 40,000. I can't tell you modern details, however, but I had to buy from description only, and I was able to go through a regular mortgage.

scott324 · #3 03/20/2007, 06:19 AM

I am going to assume since the buying price is so low this was a long time ago. That is what I am concerned about - not being able to inspect the property before-hand. Thanks for the input, I will probably go hang out by the courthouse one weekend and see how the process is handled.

Scott

VoidRaven · #4 03/20/2007, 07:21 AM

Generally you have to have something like 10% of the final bid/purchase price there at the auction that day and then pay up the rest within 30 days or less. Not sure if you are able to inspect prior, I don't think so but I could be wrong. Is this a sheriff sale auction?

Sk8r · #5 03/20/2007, 07:22 AM

THere are some real estate agents that specialize in that market. You are of course paying their fee: they buy, then sell as-is at a percentage markup, but it does give you a chance to do more than a drive-by look. We considered one in that condition, and it was very interesting, a good bargain IF you have the money and energy to do a thorough go-over, and this one was in an upswinging neighborhood.
Things to watch: go to your local version of Crime Check online, and look at the crime reports for that block. Decide what you can live with.
In our city, certain districts have 'targeted' mortgage rates: you can get a mortgage under the going rate in return for being willing to move in, fix up, and live in the place for 5 years. These are for 'renovation' neighborhoods. One we looked at was in this class: great house. Unfortunately we can't be home 24/7, and this area has petty crime at the rate of 170 incidents in the last 3 months. Lots of drugs and pilferage and inter-gang hassles...my first house was in much worse, but then I was young and crazy. Where we ended up buying, the rate was 3 incidents in the same period.
Know the period of house you're buying into: for instance, a lot of our houses are beautiful old Craftsman style, circa 1930's, and are very solidly built, but they're going to need updates in wiring and probably in plumbing. If, however, you go for one from the 1880's, there are other issues, including one we looked at, immaculate, new plumbing, new wiring, new roof, huge rooms, which smelled like a stable, and probably had served that function at some time during its career---one doesn't know how long that aroma will persist, but no matter how good the deal, if you know that smell, you have the suspicion re its history. Our basements tend to be bone dry. This would not be the case in, say, OKC, which has a very high water table.
Know your area, know its history, know the repair issues of each type of house you might consider.

Abominable Reef · #6 03/20/2007, 11:04 AM

Hello Scott,
We have been buying, fixing, and selling (flipping) foreclosures for about 4 years now (we're on house #19). have primarily bought at auction at the courthouse. Houses can be bought pre-foreclosure, at foreclosure auction, and post foreclosure. There is a lot to know about the process. It is also VERY state specific. At auction, some states only require 10% down, others, the full amount in cash. Some states have a right of redemption, others do not. Here is a website that has tons of info, and is in a similar format to Reefcentral.

http://www.thecreativeinvestor.com

You will find a wealth of info there. Let me know what specifically you are trying to do, and I'll see if I can help some more.

Good Luck!
Kevin