I am looking at buying my first home and in the process I have stumbled upon some Foreclosed homes. Is this a good idea, MUCH cheaper as far as I can see but seems too good to be true. Has anyone else ever bought a foreclosed house? Where is the best place to look for these homes? Is there any negatives to these homes? What do I need to watch out for?
2006-06-21 07:07:18 · 5 answers · asked by pdanielleh 4 in Business & Finance ➔ Renting & Real Estate
I am in the state of Iowa, if you could give me any ideas of where to look for these homes I would appreciate it.
2006-06-21 07:16:27 · update #1
Real estate agents assist with foreclosed properties?
2006-06-21 07:24:31 · update #2
A good real estate agent should be able to walk you through it, but make sure they are acting as YOUR agent and not the seller. The key element of purchasing foreclosed property is title insurance. Do not buy without it. It protects you against prior claims against that title that did not get resolved in the foreclosure.
Of course - a very good inspection is in order too.
Depending on how long the property sat without maintenance, you may have some rehab to do, too. People facing foreclosure do not spend on maintenance projects.
-Using a real estate agent is a MUST for negotiating with the bank or other entity that owns the property, and for their knowledge of the laws in your location. You may find the property, but have them contact the seller.
2006-06-21 07:16:27 · answer #1 · answered by oohhbother 7 · 1⤊ 0⤋
As said earlier - GET OWNER'S TITLE INSURANCE!
I know that Iowa has some atypical rules re: title insurance, but I forget exactly what they are. Anyway, when you purchase a property through foreclosure, the chances are much higher of some debt being out there that might have been missed during the title search. It could be your responsibility to pay that debt if you do not obtain owner's title insurance.
Otherwise, Go for it - the midwest is a great place to buy.
Regarding your loan - most lenders require the property to be livable without health and safety concerns prior to providing permanent financing. If the house you look at is really run down, you may need to get a rehab loan, or other type of short term financing. Don't worry about the time frame. A lender can always extend your qualifying time by pulling a new credit report and updating information.
2006-06-21 17:51:22 · answer #2 · answered by pseudo 3 · 0⤊ 0⤋
We bought a foreclosed home last year. Our Realtor showed it to us (showed us several, in fact). We chose this one because of its location. It was a serious fixer-upper, having been vacant for two years and poorly maintained prior to that. Some of the others that we saw were in better shape. We knew what we were getting into. There was a little extra paperwork, mostly releasing the bank from any liability for things that did not work (nothing worked). We have been here for almost 6 months and are nearly done with the renovations. We have done everything ourselves. Even with all of the work we have spent less than 1/2 of the current market value of similar homes in the area.
2006-06-21 14:58:42 · answer #3 · answered by Sharingan 6 · 1⤊ 0⤋
You need to make sure that the company you are dealing with is not a scam... b/c some of them are!
Do not sign anything until you know for sure...
Do not let them be pushy.. and push you into anything...
Now as far as the home being good to buy...
You should look for a cracked slab... plumbing problems..ect.
and make sure its as big as you want and where you want it..or
you will be like me and stuck in a place that's to small... and in a town you don't want to be in..."Our loan was approved and our time was running out and we had to pick a house".. so make sure you have a good idea of several homes you want before doing the loan!!! Shop around..
2006-06-21 14:17:58 · answer #4 · answered by angelsheart24 1 · 0⤊ 0⤋
That is how I make my living buying and saleing foreclosed homes. Great idea.
2006-06-21 14:12:15 · answer #5 · answered by soulmate_n_nc 3 · 2⤊ 0⤋