HI ALL : anyone bought a foreclosed house recently. looking to buy in the next year. live in colorado where they are having a large foreclosure percentage now. i think it will be worse in 07.so their will be more foreclosures. prices are high here. not california high but for the work force , it's high. it seems to be my best bet , or so i think so. anything to watch out for. can't seem to get the info on these homes. i worked with a guy that did real-estate and asked him about foreclosures but he steers me away from them and had me looking at homes i can't afford.i guess i come from the old school. twice your annual wage for a house purchase seems reasonably , but not much more.i've seen on a foreclosure site that states the appraised value as well as the default amount.supposedly you can purchase anywhere between 20 to 50% off.is their a catch somewhere ?. is their somewhere else i can get a home more reasonable then this.appreciate some input here.this guy isn't getting any younger.thanks all....joezee

 

I bought mine from HUD on a forclosure. I got it for what was owed on it. From what I've heard lately forcloseres are about the same price as other homes. I got lucky on mine but I bought it in 92 when the market wasn't as strong as now.

 

I am not an expert by any means but, I have purchased foreclosed properties before.
My first piece of advice is to hire a real estate attorney.
My second is to see my first piece of advice.
As laws vary from state to state the real estate attorney will be most familiar with them in your area and can save you a lot of grief.
There are some pitfalls such as tax liens that may be the buyers responsibility to deal with. Be very detailed in your offer as what you are willing to do (pay back taxes, mechanics liens etc.). Think advice from attorney.
Their are usually some real estate people who are very knowledgeable about foreclosures and you should search one out unless you are trying to bypass the commission.
The 20% - 50% off the value is not unheard of. A lot of mortgagors require an insurance to be paid by the borrower guarantying all or part of the principal if they default. When this happens the lender wants to sell the property quickly and move on, since the insurance is going to pay the difference (up to the maximum amount of the policy) of what is owed and what it sells for, someone can get a good deal. Make sure you get or do a thorough inspection as they are usually as is.
I am sure someone who is more knowledgeable than me will speak up and correct me and add to what I have stated.

Good Luck.

 

I went through a real estate agent that specalized in forclosures. I saved about 30% over the value of houses in my price range. I did upset some of the owners in my area with homes for sale when my homes selling price was published in the paper.

 

my mom bought a forclosed house in west palm beach 3 years ago for $55k, she sold it in august for $163k. she found out about it through a relative and got it before it went even on the market.

i think she hired someone attorney maybe, to check if there was liens against the property or anything.

thats the route i plan on taking when i can afford to buy a home.

 

In some states there is a provision in the law for the owner to reclaim the property, check your state. They are rarely able to do so but it is something to think about.

The lenders who hold liens against the property often send a rep to bid. The first mortgage holder has the most to lose so you are likely to have to bid as high as the largest lien.

If it is an auction, decide before you go what the maximum you will pay is going to be. Then get a bunch of cashiers checks in different denominations so you can "make change" because they often want cash, and the auctioneer will not make change for you. They will refund any overage but it takes some time to get it.

 

Think beyond property tax liens as they are extinguished when the deed to the property is transferred. You need to look out for IRS liens; they run with the property in perpetuity until the debt is satisfied. You buy the cursed property and you just bought someone elses debt.

*There is a house in my area worth $800,000 but it has a $1.2M IRS lien on it. Wanna buy it?

 

People going broke are not likely to do up keep on the house, so a REAL house inspection is needed. Buying a house with mold in the attic or basement, due to a leaking roof, is not the road to success. A real survey and not just from the plot plan is needed too. TITLE INSURANCE for you, not just the bank, is a must. Knock on doors and met the neighbors before you put down any money. Look at the state tax data and see for how much and how frequently the house has changed hands.

 

Interesting...

I think that the buying market is going to be much more favorable in a few years as we are going through a real estate bubble right now. The postage stamp lots and houses on them aren't worth the prices.

In major metro areas it's really bad.

I think it's going to crash, badly, come down to maybe 40% at least.

 

The IRS has a 90 day right of redemption. That means they can pay you the amount you paid for the house plus interest. And in keeping with the idea "we are from the govmint and here to help", the program to redeem properties has been unfunded for many years. Go to some foreclosure sales and see how they work. They are open to the public and you will see the process and hear the terms and conditions of the sales. It probably won't make sense to bid on many of the properties but eventually you should run into the right property. 06supercrews' advice of talking to an attorney is on target.
Good luck