Are the prices on foreclosed properties for real?

Question

I want to move out with some friends for the first time and I see foreclosed properties as low as $20,000. Would a home really sell for that much or is it too good to be true?

Answer 1

Forclosed properties are sold by banks for the balance of the loan and foreclosure costs. That being said, some are going to be less than others but what you need to watch out for is possible damage to those homes, unexpected property taxes and make sure you get a home inspection. Also if there is an HOA (Homeowner's Association)you must pay those fees as well. When you all sign a contract, it is legal and binding so you can't change your mind on a whim. You will need at least 20% down and $3,000 in closing costs, be able to qualify for a loan and make sure these are your friends so if something happens one person will not be the only one liable.

Please consider everything before you leap into a situation that you may not be able to get out of.

Answer 2

Prices in some areas are dropped under the 10K range, so yes, that could very well be a valid price.
Be careful in securing a mortgage to pay for the house, though; you could lose the home the same way the last owner did.
Banks/financers are extending too much credit - well beyond what people can reasonably afford to pay back.
Also, they hook people in with low rate variable mortgages - then after a year or two, the interest rate soars, and the payments double or triple. Can't make payments, lose the house.
Also, because of industries closing, towns are losing their employment anchors, so the homes drop in value. If there are no jobs, people have to go elsewhere.

There are some amazing finds right now in the US market, and if you dont have to take a big loan to get a property, you could cash in big time. Just be very careful, and research what you are getting into before you buy.

Always hire a real estate lawyer to do title search, check for leins, that kind of thing. You don't want to be stuck with the headache the last owner left behind.

Answer 3

1934, at the end of "The Great Depresion" was a good year to buy real estate. 1978 at the height of the "Savings and Loan Scandel" was another good year. 2008 will also be a good year and will rank with the other 2 as THE BEST time to buy real estate.
Will this mean that EVERYBODY can buy EVERYTHING EVERYWHERE for a good investment? No. Remember Rule #1 in real estate, location, loacation, location. 1 acre on raw (empty) land on the Las Vegas Strip sells for 65 to 85 MILLION but also in Nevada is acres of empty land that is not worth the property tax bill on it.
Yes, some houses will sell for 20K and be a bargain of a lifetime while other houses will sell for 20K and be overpriced. Price is a number; the VALUE of the property is a MORE improtant number and they are NEVER the same.
Since you posted, "first time" I would HIGHLY suggest that you start talking to real estate agents in YOUR AREA that PERSONNALY own rental property andstart building a TEAM of professional that can guide you thru the process of INVESTING in a house. you need an agent, an accountant, a property inspector/appresor, a lawyer, and a banker ON your team; watching "flip this house" does NOT qualify as training or education. In fact IF you follow the lead of the people on those shows you WILL lose money. Ever wonder WHY they quote "gross profit" and NEVER finish the math????

Answer 4

There is a mixed response to your question. On some advertisements, the 'price' you see promoted is that which the current owner is in default only, and the actual selling price may be much higher than is listed.

In other ads, $20,000 IS the actual price, but the house may be in the trashy area of the city and in need of large amounts of repairs.

In either situation, use great caution before proceeding.