How does purchasing foreclosed houses work?

Question

If the sellers say that the house is only like a few thousand dollars, does that mean that the house is really that price? Does anyone know anything about purchasing houses that have been foreclosed upon, and about purchasing homes in general?

Answer 1

No. When a house goes to foreclosure it means the person who owns it has stopped making payments. Usually they are several months behind. The bank will send them letters telling them they are behind and need to catch up. Eventually the bank will send them a final letter telling them if they don't pay up in full by a certain date, foreclosure proceedings will be initiated against them. At that time, the bank turns the matter over to their attorney. The attorney files proceedings against the owner and publishes in the paper. After filing necessary documents and notifying all interested parties by proper service or publication in a newspaper, the bank will file a notice in the newspaper stating when the property is to be sold. In the county I live in in Illinois, the sale is generally held on the steps at our county court house. The lawyer representing the bank shows up and sells the property. There is a set amount the bank wants for the property, the amount they are due plus attorneys fees and court filing fees. If someone offers more at the sale, they can purchase same. Otherwise the foreclosure bank "bids in" at the amount they are due and the sherrif issues a Sherrif's deed transfering title to the property. You need to check your local laws and see if this is the way it's done where you are. Usually the person being foreclosed still has a certain amount of time after the sale to redeem. After which time they are out. There are many things that could be an issue. If notice of foreclosure is properly given, if every interested party is properly served, if back taxes are paid, etc... You should have a title commitment issued to check for outstanding matters and should talk to an attorney to represent you. It's a small price to pay for the peace of mind of knowing nothing is going to come back to bite you after you have paid your money. In addition, foreclosed properties are generally sold in " as is" condition. Your other option is to wait until the property has gone through foreclosure and the lender has listed the property with a realtor and buy it then. Good luck

Answer 2

I see them all the time. You show up and bid on the property. If the foreclosed property has a lien of say 30,000 you will not get it for less than that. Usually the financial institution has a buyer there to bid. 1 time the bank forgot to show up (how the heck that happened I do not know) but a guy picked up a 180,000 property for 1500 bucks. Expect to pay 10% if you win on the spot and the balance due in 30 days. Sometimes you may have to also go to court to get the old owners kicked out.

Answer 3

No, what it means in most cases is that you are taking over the property subject to more senior liens. For instance, homeowner's associations foreclose all of the time for non-payment of association dues, but that doesn't wipe out the trust deeds.

Get a buyer's agent. NOW. There are huge pitfalls in buying foreclosures.

Answer 4

Most foreclosures are bid in by their lenders who then re-sell them or list them with brokers for re-sale. Those that are not are generally bid in by professionals who regularly attend foreclosures, know their markets; can quickly investigate conditions & titles & are ready to risk lots of cash. Amateurs CAN get lucky at auctions, but that happens about as often as hitting a million dollar jackpot in Vegas.

Answer 5

you need to go to county court house to find info about the property-forclosures are auctioned off usually twice a week. most of the time you need to have cash by end of day.

Answer 6

Foreclosure autions work differently from county to county, so research how things work in your county.