How does buying a foreclosed home work?

Question

How do you go about buying a foreclosed home? I see ads for foreclosed homes for 200,000 or 300,000 dollars when their worth twice that. Does that mean I give the seller/bank that much money and I get the house? I'm sure I'm missing something here. If possible please provide a link so I can get more info.

Answer 1

Buying a foreclosed home is a bargain at times, it depends on what phase of the foreclosure you purchase the house.

The phase you are speaking of is when the property owner did not bring the mortgage current and it did not sell at the auction, hence now called a REO (Real Estate On-hand.)

Once all the legal paperwork is completed and the property has legally transferred to the lender, they assign the property to a lender to sell for them.

At this point you are simply purchasing a house as you would from a person that listed it with a real estate office.

You will have to come up with the funds to close, by getting a loan from another lender. In a few instances the current lender might finance the property for you. There are the government lenders also FHA and VA.

The other way is purchasing at the forelcosure auction. In order to bid on this property you must normally have all cash and be able to prove it in order to bid. If you are the highest bidder, the lender will sign the property over to you. There is a few days of waiting for this to happen.

The best way, in my opinion, is to purchase directly from the current owner. It takes a little skill to do this. You have to figure out if you have a good deal or not.

You have to give the owner something to move, bring his mortgage current, see if there is any damage to the property or qualify for a new mortgage, but you can normally pick the property up a little cheaper.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 2

A foreclosed house is a house that a bank owns because the previous owner got behind on the mortgage payments and the bank foreclosed. The bank just wants to sell the house and usually sells it for enough to cover what the last person owed on the mortgage plus any closing costs. When you buy a foreclosed house you are buying it as-is. The bank doesn't know if there's anything wrong with it so they can't tell you if the roof leaks or if the furnace works, etc. Depending on the house, you may have to finance conventional. If it's in good shape then you could still go FHA or VA. Usually a bank lists a house with a Realtor so all you have to do is contact the Realtor that has it listed and they will have all of the paperwork and will help you. Simply put: Yes, you give the bank the amount of money they are selling the house for and you get the house.

Answer 3

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Answer 4

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RE :How does buying a foreclosed home work?
How do you go about buying a foreclosed home? I see ads for foreclosed homes for 200,000 or 300,000 dollars when their worth twice that. Does that mean I give the seller/bank that much money and I get the house? I'm sure I'm missing something here. If possible please provide a link so I can get more info.
3 following 8 answers

Answer 5

I am not an expert, but I have seen many companies that offer foreclosed homes through ads in newspapers. I have heard of many "foreclosure company" scams.
I have also seen actual homes currently in foreclosure posted in Town Halls and Municipal Buildings. So, if I wanted to buy a home in foreclosure, I would start by checking the municipal courts in that area and make the offer directly. They usually provide information, descriptions and details of the property, an outline for offers, along with the final date to submit your offer.
Once, I happened to witness an offer or bidding on a foreclosed property. The person making the offer seemed very happy - probably because there were no other offers/bids.

Answer 6

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RE:
How does buying a foreclosed home work?
How do you go about buying a foreclosed home? I see ads for foreclosed homes for 200,000 or 300,000 dollars when their worth twice that. Does that mean I give the seller/bank that much money and I get the house? I'm sure I'm missing something here. If possible please provide a link so I can...

Answer 7

We just bought a foreclosed home and we had to go straight to the bank that did the foreclosure. A lot of time the prices that you see are what the bank is still owed to them by the previous owners. Do some research and try and find out what the house sold for originally. Also talk to the Realtor that has the listing and they should be able to help you.

Answer 8

Do not expect to get a foreclosure for half of its market value. When a home goes to foreclosure, it is because the current owners could not make the required payments. If the homeowner has reasonable equity, he will sell the house in order to recoup as much of his equity as possible. If there is no equity left for the homeowner and it goes to foreclosure, the bank will insure that it purchases back the property unless someone else bids more than the bank is owed.

If it were as easy to buy properties at this discounted value as the ads suggest, I'd be rolling in more dough than I could count right now.

Answer 9

You are buying it from the bank. The only difference is there is more paper work than normal. Good luck. You can really get some great deals buying foreclosures.

Answer 10

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