I see TV commercials like 199.00 a month for Gov't seized homes! Foreclosures! Is it even true? if homes could be that cheap, everyone would have one right? Whats the catch?
2007-11-20 09:02:32 · 7 answers · asked by chocolate_krys2000 4 in Business & Finance ➔ Renting & Real Estate
It's hype. There ARE some foreclosed homes which you can buy for a very low price, but I would not ask a sewer rat to live in one of them.
If you want a decent home, you can get some deals on foreclosed properties, but not for $199 a month. More like $999 a month.
2007-11-20 09:17:44 · answer #1 · answered by acermill 7 · 0⤊ 0⤋
My experience with foreclosed homes is that they are usually in very bad condition.
When a homeowner is unable to make the payments on a home, they do not have the money to maintain the home, fix the leaks in the roof, fix the broken windows, fix the leaky pipes and do all of the other things necessary to keep the house in good condition and in particular protect the home from water damage, which is often significant in foreclosed houses.
Also, the former owners often became hostile during the foreclosure process. Holes are often punched in the walls and the doors. Mute evidence of the anger and frustration of the former owners at the problems that they were facing and their inability to solve those problems..
Also any remodeling that the former owners did to the house, they see as their property.
It is not uncommon that items of remodeling that the former owners had performed on the house have been removed...
For example, it is not uncommon to find the interior stripped to the shell of the house. Often, all of the kitchen cabinets and appliances have been removed, all of the bathroom fixtures removed. Also it is not uncommon to find that all of the flooring has been removed down to the subfloor.
It is not uncommon to have to spend $150,000 to $200,000 to repair all of the damage, and replace the flooring, the bathroom fixtures, the kitchen cabinets and theappliances..
Often the lender is only willing to discount the house $50,000 or so from what a similar model would sell for if it were in good condition.
The foreclosed house may look cheap on paper, but when you consider all of the costs to make the repairs you would be money ahead to buy another house in good condition.
The market determines what a house will sell for. Just because a house was foreclosed on does not make it a good deal. In fact the opposite is usually true.
The bank in most cases made a loan on the house for more than it was worth when it was in good condition. The bank has not been paid for months and had very high expenses from the foreclosure process. The bank is trying to minimize its loss.
The bank is relying on naive perople who think they are getting a good deal on a foreclosure to pay too much for the property and help the bank recover some of its losses.
In other words, the bank wants you the buyer of the foreclosure property to pay for the mistakes of the bank.
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2007-11-20 10:12:13 · answer #2 · answered by Anonymous · 0⤊ 0⤋
The catch is that it may be true in rare cases and for homes that are worth $199, but the fact is, finding good foreclosures is a lot of work and there is a lot of competition. The commercials are advertising courses and schools that supposedly teach you how to buy those homes and make tons of money with little work. It all sounds great, but there is no free lunch. Keep in mind that these advertisers are not buying the homes, they are selling lessons. If it was so easy, they would be buying the homes and flipping them.
There is money to be made in foreclosures, but it takes hard work and capital.
2007-11-20 09:14:02 · answer #3 · answered by Anonymous · 1⤊ 0⤋
The fact that everyone would have a cheap home is a misconception. When an area has a lot of foreclosures, it usually means that people in the area cannot afford the homes.
Government seizures are quite real, and some come with caveats, such as the last owners firebombed the place, didn't take care of the place, etc.
Also, I wouldn't expect a mansion out of a government auction...unless MC Hammer had one stowed away that no one knew about.
2007-11-20 09:11:59 · answer #4 · answered by Run Lola! 3 · 0⤊ 0⤋
It is all hype. Those services want you to pay to look at listings, and very, very few will be at $199.00 a month. The homes priced that low will need extensive renovation to make the habitable again.
2007-11-20 10:39:32 · answer #5 · answered by godged 7 · 0⤊ 0⤋
Price reflections conditions.
If you're getting a house for what would be a low car payment, you're getting what you paid for. (Unless you're in a town of under 1,000, in which case, a house could easily be $20,000.)
2007-11-20 09:24:34 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Dont know the catch, but we all know if it sounds to good to be true then it isnt.
2007-11-20 09:12:02 · answer #7 · answered by Anonymous · 0⤊ 0⤋