I'm a first time home buyer- thinking in looking into buying a foreclosed property-?

Question

how difficult is it to purchase a foreclosed property- is it recommended.?? I was told by a realtor that there are too many problems with this-regarding paperwork etc

Answer 1

You'll need to spend around $500 for a real estate attorney first time around, until you get comfortable with these type properties.
Money well spent, lots of problems out there getting a good, clear title. I'm not an attorney by the way !

Answer 2

Purchasing a foreclosure is like buying anything else. I'm a Realtor in Florida and believe me it isn't as bad as most people may think. There different reason a house would go through foreclosure, but it don't mean it will be trash. I would suggest you inspect as you would any other house and check the title history and know the reason for forclosure. It could be the owner fell through hard times and could no longer afford the payments, felled behind on taxes, or anything of the sort.
Foreclosure is different than a "Handyman special" and may not require tons of improvement work.
A lender auction properties at a tax sale-not necessary a foreclosure. The owner would rather sale the property at a low price so their credit won't be to damage. Also know- just because it is a foreclosed property dosen't mean the price would very low.
By the way-Realtors do make comminsion from these sales.

Answer 3

How difficult is it to buy foreclosed property?
Well that really depends on the property. The most important thing to remember is that purchasing a foreclosed property at sheriff's sale comes with what is known as a quit claim deed. This basically says that the sheriff has done nothing to create a lien against the home. But, there can be existing liens against the home that will be passed on to the purchaser. Also, Sheriff Sales are rarely good deals as the banks will bid exactly what is owed to them.

Now if you are dealing with HUD or other VA, then it is possible that s/he isn't able to handle those transactions. Brokers have to be file paperwork to be able to sell homes in that manner.

As to Realtors(r) making money off the deal, they can if they know what they are doing -- and if they are "good agents" that should matter.

Answer 4

It depends on the property. My husband got a great deal on a really nice house ($110K market value, bought it for $49 K) because the home owner had done a lot of improvements when he found out that his wife was cheating on him and committed suicide (not in the house). The house was mostly paid off, so the bank was just trying to recover what was left on the note, since the wife didn't want the place and let it foreclose. But, she'd filled it with all sorts of trash, so no one else was interested in it because they didn't want to clean it up. Once he got the trash out, it turned out to be a great house that needed no work what-so-ever. But, since foreclosures are sold as is, I'd recommend bringing someone with you to look at the house's structure and tell you what kind of work it needs so you don't buy something that will cost you more to fix up than what you can afford. Bidding may be fierce, but the point is to offer as little as possible since you're trying to get a bargain. The bank just wants to get its money back, whatever's on the note, and that's a guessing game for you. Of course, the bank will get more if they can, so if someone's absolutely in love with it, they may bid high and drive the price up. You usually only have one shot to get the figure right. Yes, it may be more work, and depending on your price range, many mortgage brokers won't give you a conventional loan for a house under $60 K, so you may have to have the money upfront. The real reason your real estate agent is trying to talk you out of it is because he'll get a better commission for the work load if he talks you into a more expensive house.

Answer 5

Any realtor who needs a sale will help you out. There are a few
additional problems but it sounds like that realtor really wasn't
interested in helping you out. Find another one. You'll probably
have to pay an appraiser to see what, if anything'. is wrong
because basically you're buying " as is ". Foreclosed properties
can be a good deal if you know what you're doing. You are
benefitting by somebody else's misfortune but..........

Answer 6

if you buy a foreclosure at auction, all of the above is true. if you buy a foreclosure listed with a real estate company, none of the above is true. Yes, there is more paperwork for the agent to do, but it is not difficult. I would say there is no more difficulty involved and it may actually be easier to get a better deal, because there is no homeowner involved, therefore no emotions. The banks only look at the botom line.

Answer 7

a realtor will always tell you that because that is where they get their $$ from... buying a foreclosed home is easy, but its more like an auction thing, you must bid on the house, and hope youget it... might be some repairs to house, who knows... thats the risk you have to take... but paper work on it is same as buying a regular house!! sometimes easier!!!

Answer 8

Realtors GET NO COMMISSION on forclosures.
DUHHHH!


The lenders sell them outright.