what are the odds of purchasing a house for $14-$17,000?

Question

I live in Cleveland. im trying to buy my first house without a mortgage. I saw some houses between $14-$17,000 and the pictures of the outside are great but i would love to know what are the odds of a beautiful house on the outside.. could be not livable on the inside. Im trying to purchase in June of this year.
Oh and another thing....should I get a mortgage instead? but the reason why i wont because Im renting now and i would hate to move into a house where i would feel like im still paying rent.
Thank you for listening
I could really use the help.

Answer 1

The house is probably considered to be REO (Real Estate Owned). That means that the house was probably foreclosed on and was taken back at auction by the lender or the bank. That being said, it would sell for that price, because it is most likely a burden on the bank at this time. Here's why:

A property that is worth $50k at inception that is destroyed on the inside will sell for the price of the shell fo the home + real estate cost + land. Land in Ohio for .43 acres goes for roughly $10k. So, you are looking at the house being worth about $7k.

If you want to fix it up you have that option. These REO's are pretty much for everyone, but are usually bought quick during a good market by private investors who flip the house and make a profit. However, since the market is failing, it is possible that this house is owned by an investor, or the bank, and both are looking for a quick sale.

When an investor takes a house at that price, they usually don't have to pay a mortgage, as they usually buy it outright. Their fees are taxes and basic upkeep to not have a violation against them. However, the cost of a mortgage company is about $2k/month + commission to the real estate agent who sells it. That's why they would sell it so low.

Your best bet is to speak to the agent and ask for a tour. An agent will disclose everything wrong with the house. However, if it is owned by an investor, I suggest you stay away. They don't always tell you everything wrong with it, and you will be looking at more money for repairs than you thought of.

Your best bet is to look at the following before purchasing this home:

REOs in neighborhood. You can get this from a real estate agents office. An REO neighborhood usually has the highest crime rate, so you may want to check with the police for any break-ins and police reports filed. Also, You might consider seeing if you have any friends who are contractors/electricians/etc, as they can tell you the actual cost of fixing the property.

Hope it works out OK!

Answer 2

$14 - $17000? Does this house have wheels?

Out here in California, that amount would be someones annual rent. I'm sure it would need some serious work for that price. Although, I did see a house auctioned off in South Dakota for about $7000. It needed paint and carpet, but it was livable. Find what the homes in the immediate area are going for, and that should give you an idea of how much work it might need.

If its a repo home, you need to read the fine print. If the house has any leans or seconds on it, you will be paying that as well.

Answer 3

Your in Ohio and your lucky... I have been looking for homes in that area (well, a county or two East) and have found some great homes for the same range. People here do not understand that every area in America is NOT like California or New York, there ARE still inexpensive homes to be bought if you look in the right area. I found a 3 bedroom/ 1 bath cape cod style house in that area for $15,000. People live in it right now, so there can't be that much repair work involved!! You can find something, It would be better to pay cash for it and not have a mortgage. That's what I am planning on doing!

Good Luck!

Answer 4

your better off getting a mortgage...its an investment...youre paying towards owning the home not like rent where it just goes down the toilet...and with your own home..you can decorate and remodel it any way you wish...there is no landlord that is going to yell at you...way better off getting a mortgage...

Answer 5

You may also like to consider the option of renting to own a home. This may save some money in the long run .

its best to check all of your options before deciding on the one that would best fit your needs.

Answer 6

most average livable houses cost at least $70,000 in Ohio. It probably has many things wrong with it like the plumbing.

Answer 7

At that price, you might have to spend a fortune to get the inside redone. I doubt you could just move in without major repairs first.

Answer 8

unfortunately, i want to be thorough so that you understand, therefore, i write long answers, but here:

Moby's got some pretty good advice in his answer. he tells you to be careful, read the fine print and to learn if liens exist on the house. but it isn't true that you have to pay those liens. i'll explain in a minute. and in the LONG 10 minutes you will take to read this, i will explain why you do want a mortgage.

speaking as a national exchanger on investment houses, i haven't even heard of ONE detached, single family house in the ENTIRE usa since the late 1960s! and THAT was a cheap house then, too! at least in the 60s, in chicago, it was!

another kind person mentioned that the "house" could be a trailer, which is true. in that case, it would never be real estate: it is personal property. the pad it sits on is real estate and it is normally rented from the owner. the utilities that serve the trailer home usually come from a central facility on the trailer park's grounds, and how one pays for them can be, but usually is not, negotiable. usually, they are split so that you know what you used and you pay for it. real estate taxes are assessed on the pad, not on the trailer home. i do not believe, but you need to ask an accountant or the county where cleveland is, or, the state of ohio, if you must pay taxes on PERSONAL PROPERTY that you buy, such as a house trailer. it varies from state to state.

BUT... you said that you saw pictures of the exterior(s). where did you see them? are you sure that the price wasn't a misprint? it's possible that they are listed for $170,000, not $17,000.

okay, let's pretend that the price really is what you say it is. let's pretend that they are all single family, detached houses, and not trailers. at those prices, you should swoop in as fast as the fastest bird in the world and gobble as many up as you can fit into your bill, NOW! but, what is the catch???

if you saw them in the newspaper, call the listing broker to ask about them. do NOT continue to rent! buy! buy! even if they look like pigsties inside, but them. just get a home inspection! then you'd know what must be fixed now and what you can fix later. you'd do that with loans. if most houses that look like those in the cleveland area (no matter where in cleveland, btw) sell at say, $100,000, then how can you go wrong?

even if you bought one and lived in the BASEMENT while the house was being repaired, you would still go running to the bank. i kid you not. the reason i said in this case that location, location, location (the only words you ever need to know in reference to buying real estate) is NOT important is because even if they are located in a rundown hood:

1. the general population of the area is poverty stricken;

2. the land has been declared as "condemned" by a governmental body due to its wanting and taking it by the process known as "eminant domain," which would mean that perhaps the state is going to knock the houses down to build a highway where they are;

there are ALWAYS "affordable housing programs" in place for those stricken by poverty, so therefore, you'd fix them and then sell, making bookoo dinero; or

the government MUST pay you "fair market price" for the property it condemns. so if you get a piece with a house for only $17k, the gov is going to pay you far, far more, even if you do not do anything other than pay taxes on it.

since a minute has gone by: no, you do not take title subject to the liens that exist when you contract to buy. title has to be "merchantable," meaning that you can place a mortgage on your property or sell it immediately, free and clear of any liens. the seller has to pay off the liens at closing or the seller does not close. it's that simple.

else: you really need to know that purchasing a home is the highest single way for americans to BUILD WEALTH. go to www.aarp.com and read up on that. also use your search engine, putting in keywords like: "how to build wealth by purchasing a home," as well as "why does buying a house cost me less than renting?"

you see, what you really NEED are two things:

a. you need to find a mortgage lender that will pre approve you in writing for how much you can afford, before you take the other thing that you need, which is:

b. a buyer's broker (does not cost you anything) that is knowledgeable and experienced, and who will easily be able to explain to you exactly what it means when she says that she is "YOUR AGENT." she could be a buyer's agent to you only, or, she could be a dual agent to both you and to a seller of a house you wish to buy, but when she acts as a dual agent, certain specific rules apply. so then, it only follows that you need a buyer's broker that will represent YOU, over and above her needs (getting paid a commission at closing). it's YOUR money, yes? it is YOUR life, yes? so therefore you need someone that really protects and represents YOU.

you will learn very fast how buying a house instead of renting will build wealth for you, since rents just go up and up and up...

first, ensure that the prices weren't a misprint. then, drive by the properties. third, if still interested, do parts a and b above. while you do part b, tell her that you want to know if the land was taken by the government by eminant domain, and if that is why the houses are so cheap.

10 minutes have passed, so: you buy the house with a mortgage because you will not believe how much money you will get back on your income tax returns! for your personal residence and one, for example, summer house, you can deduct ALL of the interest on the mortgage and ALL the real estate taxes you paid, each and every year. you take that amount, multiply it by your tax bracket (check this with your tax preparer, for i am not one), and basically, that is what uncle sam gives back to you. if you don't get a return now, you WILL, FOR SURE, once you take a mortgage! (also, if you pay "points" for your mortgage, i do think you can deduct that too, in the year you buy--again, ask a tax specialist).

you need professionals to help you. NEVER buy or sell real estate without professional help or actual hiring of an AGENT. ask your real estate attorney why i said this.

if you have a specific question after you find out about the prices and any additional information, kindly write to me directly at my email address in my profile.

gee, i wish, if the prices are a fact and all else is okay, that i were in your shoes! you better believe that i'd buy as many of them as i could get my measly fingers on, PDQ!!! (sorry for this long verbose answer, hope it helps you, though).

Answer 9

Any house that cheap is a dump, but it's a fair question.

Answer 10

chances are the house is probably messed up. cheapest houses i seen are at least $100,000 but go for it