Foreclosed homes?

[Mazda4ever]

Supposedly I hear of all these deals on foreclosed homes going for super cheap. Almost making buying one of these homes cheaper than getting an apartment. I have about 2-3 months to move out of my Moms house and someone mentioned I should really re-consider getting an apartment and look at foreclosed homes. However alot of these places look like crazy gimmicks. Where should I look for the real deal?

[deadmeat]

The first thing you want to do, is find out how much of a mortgage you can qualify for. Find a competent mortgage broker in your area that is looking to write a policy for you. You will need to have information such as Tax returns, paycheck stubs, bank statements, and a decent amount of savings put away for a down payment.

Some cities/states offer what's called a "first time home buyers program" where they offer to give you a sizeable chunk of money, interest free, with no payments until you A) sell the house or B) move out of the house and no longer live there but still own you. It may vary depending on the city/state program you use.

Once you find out how much money you qualify for in a loan, it's time to find your house.

To find forclosures:

The best thing to do, is keep an eye out in your neighborhood, or town.

Usually what happens, is when a home forcloses, there's all kinds of legal notices posted. Look in your local newspaper, forclosure notices are posted there, a long with other legal notices. Check downtown at your local town hall. You can find all kinds of information down there. Someone down there will be able to tell you how to find forclosures.

STAY AWAY from those programs that say "Give us money, and we'll show you how to do it!" All they do is the same exact thing you can do for yourself for FREE with a little foot work and some phone calls. I.E. Bruce A. Berman, and Armando Montellango or whatever the [fizzle] his name is. Been hearing a lot of these commercials lately.

Now, when you find a home you like that is in forclosure, you approach the homeowner. You tell them you will buy their house, so it does not ruin their credit. You find out how much money they owe on the house, and you offer them $1-10k more than they owe on the house.

Lets say you got approved for $140k worth of a mortgage. You find a house you like, that's going into forclosure, and you find out the person living there owes $100k. you approach them, offer them $110k to buy the house. You make sure to point out to them that you are offering them $10k more than what they owe, to start over again, find a rental, use it as a down payment somewhere else, ect. You have to be a good salesman, present yourself smartly (casual wear, a suit and tie will scare most of these people.).


So how do you approach the homeowner? 99% of people do it with a letter in the mail. Make sure its clearly hand-written, and well thought. Let them know you are making a generous offer on their home, to prevent them from going into debt, and to prevent the forclosure of their house. Be as friendly and outgoing as you can. Provide contact information for them to reach you at, so they can call you, counter offer, or accept your offer.

Short Sale:

There is also a thing called a short sale. Basically what this is, you find a house that you want, and the owner is going into forclosure. the amount of money owed on the house, is more than your loan was approved for. Lets say you still have your $140k that you were approved for. You find an awesome house for $180-200k. You NEED this house, your wife/girlfriend is moist in between the legs for this house, you can't live without it.

In this case, what you need to do is get in contact with the homeowner. You present them with your offer for the house. Lets say you offer $135k for the house. From there, the homeowner gets in contact with their bank. The last thing the bank wants, is to take a house back, especially in this home market. They have more houses now than they know what to do with! So the homeowner notifies the bank that someone is interested in buying the house, but they are offering less money than what the owner owes on the house. From there you and the bank will probly be in contact, and you will negotiate on the price of the house. If you convince the bank to sell to you for less than what the current owner owes, that's what's called a short sale. The bank sells you the house for less than what is owed on it.

Good luck with your home, and remember, buy LESS than you can afford, because you never know when you might be in a pinch for money in the future, and it's always good to have that little extra available when you least expect it.

Good luck, mang!

-meaty

[Stealth]

I bought a house about 12 months ago now. If I could go back I would have looked more into foreclosed homes. However alot of them are in very rough shape because it kind of goes hand in hand that people who dont pay their bills often have other issues in life as well. Also alot of people get foreclosed on in the first years of ownership which means they haven't payed the mortgage down that much. Its hard to get foreclosed on if you have a budget and lived in a house for 10-15 years. Unless you loose your job but most people at that point are smart enough to sell at a loss instead of getting forclosed.

If you search long enough you can probably find a good house for a good price.

[Mazda4ever]

Ill have to try the local paper and whatnot.. I have good credit, I just dont know if I could afford it, I make like 2500/mo on avg and my girlfriend makes maybe 1k a month lol. My Mother really encouraged me to look into it and I thought the same exact thing Stealth, about how if a home is foreclosed its probably not in the best shape..

IDK if this link would work, but this house is 1 street over from me and is an unfinished project. they are asking 114k for it because it was forclosed
Single Family Home - 123 TERRY CT, WOODSTOCK, IL, 60098 - Realtor.com

[mushkid]

my parents were looking at foreclosed homes, i was 16-17 at the time so i was like "sweet a new home". but now i think about it and i kinda feel bad that people lost they're homes like this.

i have seen sweet deals on foreclosed homes!!, most likely i will end up getting one. good thing that the real estate market went down!, people were just abusing other people when it came to housing

[KING6]

now seems like the best time to buy a house if you can afford it and have stable income.

there is atleast 1-2 homes on every block in my neighbor hood that are for sale..cheap, and have been for sale for quite some time. I hear thats the same case with many places.

[lnlogauge]

If I were you, I wouldnt add a girlfriends income to your income, unless your 100% confident things arent going to change. 2500 would be a challenge to own a home, but for a low enough price I guess you could. Car payments and insurance on top of that would suck though.

From what Ive heard you need like 10% of the home for down payment to get decent rates, but I live in a apt, so i dont know a whole lot about that.

[astrochimp]

I actually work for a real estate investment company and we buy foreclosures and rehab them like crazy...We do 10/month at the minimum.
ALOT of investors are getting FILTHY ass rich this year..one of ours is 24 years old and will be a multimillionaire by 2009(total properties, cash, equity)..(kinda makes me ill but Oh well)

DEFINITELY look at foreclosures..check your local MLS where you will definitely find plenty of vacant bank owned homes.
Properties Owned by Countrywide - REO Homes
that's a biggie along with homesteps.com (freddiemac), fannie mae's site
Fannie Mae-Owned Property Search
and check out HUD homes
HUD Homes
which will get you in there for Nothing down.

Just make sure you know what you're getting in to and the repair/upgrade total.
It's easy to pay TOO much for a foreclosure AND/OR get one with Major Expensive Issues.

The Razmus Team - Real Estate Sales and Investments in Michigan

[KING6]

Originally Posted by lnlogauge

If I were you, I wouldnt add a girlfriends income to your income, unless your 100% confident things arent going to change. 2500 would be a challenge to own a home, but for a low enough price I guess you could. Car payments and insurance on top of that would suck though.

yeah definetly dont include the gf in buying a home. I originally did that, the bank did 2 credit checks on both of us, all was going smoothly, then the day of signing papers, they told us they did another check and found out she had some cell phone crap on her credit. Raised my monthly payments by $500. She got booted off the deal and Im the only owner. BEST thing that ever happend to me, because shortly after..she went [fizzle]in nuts.

I bought mine for 150k, first time home owners deal..no money down. Paying like $1200 a month. It sucks, but now that I think about it my other option was to get into an apt for $1000 a month.

[magik8]

Keep in mind that "everyone and their mom" wants to buy foreclosed homes. Also keep in mind that, if you actually plan on showing up to the sheriff's sale for the forclosure and bidding on the property there, you are in for some competition. There will be large banks there with deeper pockets than yours. Also, I believe you need to have some percentage down right away if you're doing this.

The next best thing to actually buying a foreclosed property at a sheriff's sale is to work with a realtor who specializes in these types of properties. I.e. works with banks who just bought the houses at the sheriff's sale for a low price. While you won't get quite as good a deal as buying direct from the sheriff's sale , you will get the house from a bank who just bought the forclosed house at a cheap rate and likely is selling the house still below-market value. You'll also have much more flexible financing options than buying direct from the sheriff's sale.

[magik8]

oops, double post (please delete)

[astrochimp]

banks aren't in the business of buying homes at sheriff's sales...

they want Nothing to do with owning foreclosed properties

[nate_v8]

Yeh they had to remove my wife from the loan application to get it to go through. I will say this though I was told by many people buy don't rent the house payment should be about the same. I paid $445/month for renting a house, and a home loan for $103,000 30yrs @ 5.875% is $785/month including tax and insurance.

[astrochimp]

Originally Posted by nate_v8

I paid $445/month for renting a house, and a home loan for $103,000 30yrs @ 5.875% is $785/month including tax and insurance.

The $445 rental house was as NICE as the $103,000 HOUSE?

nobody is going to pay a $785/month mortgage on an investment property and then Rent it out for $445..they'd lose their ass

i shouldn't say nobody, there are some idiots

[Mazda4ever]

I know what your guys are saying about my girlfriend, IDK we've been together for almost 3 years now so I guess I'll see what happens.. I'll keep looking into everything.. Maybe its just not the time