Foreclosures?

Question

why are houses that are on the market for foreclosure so cheap? is there something particularly wrong with them? also if i found a foreclosured house on yahoo real estate in my area that i was interested in, how do i contact the agent without having to pay online to sign up? is there a way to just find out how long the house will be on the market and if it has been sold yet?

Answer 1

Many foreclosed properties are offered cheap, but that is because they have serious problems.

When a home owner knows they are going into foreclosure, they stop doing maintenance on the property. In fact, when it gets time for them to be evicted, they often get angry at the bank for foreclosing, and will damage the house - take the A/C units, put holes in the wall, even take the sinks and light fixtures. Not all of course, but this is typical.

Then there is a period of time of 4-18 months while the legalities are taken care of before the lender puts it up for sale. During this time the property is vacant, and typically vandals break in, do more dmamage, take more things, spray paint the walls. No one is around so when the roof leaks or a pipe bursts there is water damage that goes undetected for 3 months. So by the time it is ready to be sold, the house that should be worth $200,000 is going to need $30,000 of repair/rehabbing to make it habitable again. Since it is tough, and expensive to wait the weeks or months to get the repairs done, most people can't handle a project like this.

So an investor will buy a foreclosed property like this for $110,000, put $30,000 into repairs, plus have other costs of about $10,000, then have a nice new, ready to sell or rent $200,000 property they have $60,000 equity.

A lot of people are eager for the wave of foreclosures that are starting to hit, expecting to get cheap houses. Most have no idea what the problems the great majority of these properties have, and the work that needs to be done.

They are extremely profitable, if you knwo what you are doing.

Answer 2

If HUD or a bank owns a house they have a legal responsibility to sell it for the highest price they can.

If they have a house that sells for what seems like a low price then you can bet that when you investigate it there is a very good reason.

The best deals I have ever gotten in real estate have been when I have found very depressed people that just wanted to get some crumby house off their hands.

For instance a duplex that had a very leaky roof and "renters" that had not paid rent in months. The guy sold it to me for much less than it was worth just so he didn't have to deal with it anymore.

The foreclosures I have seen have attracted so much attention and so many potential buyers that they sold for much more than I felt they were worth.

Good Luck.

If you are talking about bank owned or HUD homes then I just answered your question and any Realtor should be able to tell you how long they have been on the market.

If you are talking about homes being sold at the courthouse that is another matter. I would not get involved with that. In my state the banks end up bidding the full loan amount at almost every auction so they end up owning all the houses.

Answer 3

Finally a query in my wheel condominium. REO or Real Estate Owned by means of the Bank isn't a well funding. The reality is that banks aren't dull. You are not able to simply stroll into the financial institution and ask them for a record in their foreclosure. Although banks aren't within the truly property industry they are not going to allow their backside line get certainly destroyed by means of effortlessly giving those residences away. Banks will constantly rent a realtor and try to get retail for the estate, which almost always they're going to get beautiful practically generally. When making an investment in foreclosures the quality approach to do it's to get a record of folks who're in preforeclosure or whose estate goes up for sheriff sale (in Pennsylvania). Once you might have this record you have got to get in touch with the landlord and ask their permission to visit the financial institution and talk on their behalf. It is right here in which you're in a position to get very well offers on properties. You will then move and negotiate the fee with the financial institution. Once you succeed in an contract with the financial institution there are then many go out ideas you'll be able to comply with. You can rapid turn the condominium by means of assigning or wholesaling the agreement to a further investor. Or you'll be able to do all of the rehab and fix paintings youself and hire it out for a per 30 days coins drift. So while handling foreclosure don't stay up for the financial institution to take manipulate of the estate, you have got to get to the present occupants and that's in which the truly earnings and amusing starts.

Answer 4

Because people bought houses they couldn't afford and now there are TONS of houses on the market. People can't get loans because they have lousy credit and banks aren't handing loans out like candy anymore. All of this means people (and banks) have to sell property at a low price just to get out from underneath it.
You can call any realtor and ask them to send you a listing of homes in your area that are foreclosures, HUD homes and short sales.
You really need a realtor because you could get screwed over MAJORLY without one & if you're new to the real estate world. The seller pays for realtor costs, so it doesn't cost you anything to rely on their expertise.
They'll also help you weed out the houses you want from everything. USE ONE - you'll thank me later for the suggestion!

Answer 5

cheap foreclosures are nothing but a ticket for the scam artist to sell you a junk programs..
if you really want to get into this other then finding a low priced home and even then..
check out the auction sales done by your county court house.. most do it on the 1st or 2nd tuesday of the month

Answer 6

generally it is cheaper for the current loan holder(bank) to sell the house as is. It is more expensive to get the house up to retail standards(paint, landscaping, small repairs...) than it is to just sell it outright at a discount. Typically houses that are in forclosure are fine. The current borrower simply can't continue to pay for whatever reason. It is typically difficult to bypass the listing agent, however you can call banks and ask for a list of R.E.O.. this is a list of forclosures. Call me to get fully approved on your financing. I am licensed to write mortgages in 32 states. Jeff Elliott 1-877-742-5763 ex297

Answer 7

Either visit your bank or credit union and ask if they have any REO properties OR
Go down to the courthouse to find out when the sheriffs sales are .

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Answer 8

I can help you, read this:

Foreclosures become more than some bargain for
Jim Buchta, Star Tribune

No one needs to remind Danelle Hoeppner that the number of mortgage defaults is skyrocketing. Almost two months ago, she and her fiancé, Brad Cheney, made an offer on a Bloomington house that was in default, but they have yet to get a response from a California lender that holds the mortgage.

"With all the houses on the market, don't you think they'd want your money?" Hoeppner said. "I guess that's not how it works."

If you believe the infomercials promising instant wealth from distress sales, then the record number of foreclosures should mean easy pickings for investors. But real estate agents and prospective buyers say that offers on many bank-owned houses go unanswered for weeks and! that closings are sometimes abruptly canceled.

Sales agents blame the delays on a growing backlog of listings and on ill-prepared mortgage companies that might be hundreds of miles away and grossly understaffed. Some experts say that buyers themselves are contributing to the problem by making unrealistic offers in hopes of snagging a bargain.

"It's unbelievable, and I'm hearing this from every agent I talk to," said Jay Anderson, of Coldwell Banker Burnet in Minneapolis, who has been waiting six weeks for a response to an offer of his own on a foreclosure home that he plans to hold for investment.

Listings backlog is growing

Experts say that buying a bank-owned property shouldn't take longer than a traditional transaction and that most come off without a hitch, but real estate agents say some buyers are facing increasingly frustrating delays as mortgage delinquencies rise.

Earlier this month, a Minnesota study based on sh! eriff's sales said there were 11,207 foreclosures statewide in! 2006, a nd a record pace has continued through 2007. In July alone there were 975 foreclosures in the 13-county Twin Cities metro area, up from 392 a year earlier, according to RealtyTrac.

The sluggish housing market is doing little to help those who are unsuccessfully trying to sell their houses before the situation comes to a final sheriff's sale. These houses often become "short-sale" listings, in which the owner has made arrangements with the lender to sell the property for less than is owed so that it won't go back to the lender.

Those transactions can be more complicated, in part, because the sale terms must be approved by the lenders. Additionally, those lenders often are in offices far away where loss-mitigation departments are struggling to process the listings and to prevent other homeowners from meeting the same fate.

Richard Bauer, the agent representing the anxious sellers of the house that Hoeppner and Cheney are trying to buy, said that, acr! oss the country, lenders are struggling to adapt to changing market conditions.

Bauer said that he has received four offers on the Bloomington house, but that none of the other buyers was willing to wait for the lender to process the offer, leaving the sellers closer to foreclosure.

"You hear that and it doesn't sound logical," said Bauer, an agent with Edna Real Estate in Minneapolis. "But you ask: 'Is this whole mess logical?'"

An expert's view

Danielle Babb, a California-based real estate investor and author, said inquiries about bank-owned listings have increased 400 percent nationwide, but because a typical lender can process only 10 to 12 a day, the levels are becoming unmanageable.

Babb said most major lenders and brokers are well-equipped to handle the barrage and have large staffs that can be reallocated from one task to the next. But many small- and medium-size companies that are new to the mortgage industry just! aren't nimble enough to process these transactions quickly en! ough, sh e said.

"And with layoffs [happening within the industry], banks are even more understaffed, so they're not ramping up yet," said Babb, who recently coauthored "Finding Foreclosures."

Dan Arrigoni, president and CEO of Twin Cities-based U.S. Bank Home Mortgage, said his company doesn't have a backlog of listings, in part because it didn't offer the riskier sub-prime and Alt-A mortgages that are much more likely to default.

The company, which works with a national real estate service and local sales agents, now has just under 120 properties, and the average market time for them is about four months.

"The Realtors want to sell them as bad as we do," Arrigoni said.

But he acknowledges that many mortgage companies are preoccupied with staying in business. "These companies are struggling to survive and to fund loans," he said.

Patrick Carey, senior vice president of default and retention operations for Wells Fargo Home Mortga! ge, said that while the number of listings his company owns has increased, the firm has ramped up staffing and training to meet demand.

Carey said his department is trying to process its houses quickly in large part to avoid negatively affecting the community.

Foreclosed houses can be a drag on property values if they fall into disrepair or if they are sold at fire-sale prices.

"We don't want to deteriorate values in a given neighborhood," he said. "Investors need to get market price for that property."

From both sides

Byron Anfinson of Coldwell Banker Burnet said he has seen the situation from both sides. He has had buyers who were essentially left homeless because of problems with title work that delayed a closing, but he also has received a response from some lenders in as few as 15 minutes.

Lenders blame consumers for some of the delays, either because of ridiculously low offers or because of incomplete pape! rwork submitted by the buyers.

Jim Miley, president o! f reside ntial real estate for Bremer Bank in Minneapolis, said many lenders are losing big bucks on their listings because they financed them at the peak of the market or extended credit beyond the value of the property.

"We've had some very zealous lending going on," he said.

Some even speculate that lenders aren't eager to sell their listings because they're waiting for the market to improve or the market has changed since they priced the listing.

Patrick and Briana Schiebout wondered if such a situation happened when they bought their split-entry house in Rosemount. The first-time buyers saw it, loved it and made a full-price offer in an effort to clinch the deal.

It took the bank seven weeks to respond, and then it countered with an offer slightly higher than the original list price.

The couple, who saw a foreclosure as a great opportunity to finally get into the market, were willing to pay the higher price because they just didn'! t have the energy to go through the process all over again.

"We threw our hands up in the air," Patrick said. "We didn't want to wait another seven or eight weeks, so we accepted."

Answer 9

Because they are gimicks to get you to sign up for the site.