Buying a forclosed home?

Question

What are the drawbacks?

Answer 1

You can offer $95,000, for example, on a foreclosed home that might be worth $108,000. Keep in mind once a home is foreclosed they increase the price so dont fall for the first offer.

Answer 2

The drawback  are :

1- problems with the heater,furnace. plumbing.

2- high cost of plumbing parts,  and remodeling cost.

3- plumber will cost you about $50- $80 an hour...and if the house need major plumbing  you will spend about  $600-$1800

4- water heater cost these days range between  $350-$1000

5-  new  tile ,new paint, tile,and new carpet  will cost you  alot.

6-  you will face with  bad contractor, and labor trying to rip you off...be smart, take your time and ask people around you for ggod contrctor or labor.

7-please check reference, license number with the state for your plumber, electrician,and contractor.

8-location --location --location ..please try to buy in good area,and safe neighborhood.

9- please visit the property during the day light and night too..

this will give you more feeling about it.

10- try to buy HUD property... it's much cheaper and fast to close it.

11- find  person with construction experience or back ground in civil Eng and ask him or her to give you a full report --cost less than  $200 about the foundation and cost of the fixing the place.

12-never pay full price for HUD PROPERTY..always take off 8%-12% of the prices. ..and hire an experiance broker .

never waste your time to buy pre-short selling... you will waste your time big time.

13- do not spend a lot of money trying to fix the place , or go  over your budget and do not take a long ..long.. time to fix it.

it should been fix in 30 days or less..

14- try to work in some area by your self to save money  in  labor like do the paint, take the trash, pick the old carpet...etc

15- take more than 3-5 bids, check their referance, licinse,and get an agrement in writing befor they start in their job.

16- never..nver..never pay big down payment to a contractor or labor in advance.

17-ask them what they need for parts  ,and then  go and pay for it... this will save you alot of money.

my last point is wish you best luck in your new home.

Answer 3

You need a lawyer and a really smart banker to make all the paperwork turn out right.  The house will probably be trashed and need major repairs.  Make sure you can get the water and power turned on for the inspector.  It may be vandalized during escrow so you should be prepared to cancel the contract after you do the final walkthrough.

Unless you are able to do all the repairs yourself, it may be more expensive to repair a foreclosed home than it would be to buy one with no major defects.

Answer 4

Just make certain that you have an inspection done by a licensed home inspector and that you can afford the house, the upkeep, the mortgage and the insurance and the utilities and other costs, such as real estate taxes.

Regards,

Dan

Answer 5

Foreclosures are a tricky area.  It is best to work with a Realtor familiar with the process.  Most of them are bids and in the case of multiple bids, usually goes to the highest bidder, contingencies are rarely considered and the home is generally sold in as is condition.

They are generally more headache than they are worth.

Answer 6

I don't know where some of these answerers practice real estate, but you just need a REO savvy Realtor to get you a great deal.

The only drawbacks are that you can wait and wait to hear if your offer is accepted, you don't get a seller's disclosure (a home inspection is mandatory to protect yourself), there is a big packet of papers you have to sign that says you cannot sue the lender for anything, and it can take awhile to close.

Other than that, there are no differences.

I don't know a RE attorney in my yee-haw town that charges $100 an hour.

Answer 7

There are draw backs to anything you attempt to accomplish. The draw back to operating your vehicle is that you might or could have an accident, or someone could run into you. Do this prevent you from driving? I hope not, you have to take certain intelligent risk if you want a good deal.

When you  purchase a home from an individual there are draw backs. Are they telling you everything they know about the property? Are there things that they don't know about the property? Such as the water pipes have been in excellent working condition for the last 4 years. It does not mean that the water pipes will not break 3-4 months after you move into the house.



Use common sense when you are purchasing anything. Get the best possible information you can about the property you want to purchase.  Do a visual inspection of the house through windows and see if there are things awry in the house.

Everyone that is in foreclosure do not leave their house in  a mess nor do they steal carpet, mark up the walls, pull the toilets out of the bathrooms.

I find that most people that find themselves in foreclosure simply move out and try to start over again and do not have time to damage the property.



Talk to the neighbors about the previous owners and see if you can find out what type of owners they were. Did they take care of the house? Did they normally mow the lawn or have a landscaper to do the work. See if the house looks like every other house on the block.

Walk the lawn to see if you can find any soft spots in the soil indicating there might be a leaky pipe or something.

See if you can crawl under the house to see if there are leaking pipes. Use your nose to see if you an smell gas emitting in the air.

Check with the gas company and see if there have been any problems with the gas. When you have it turned on the gas company will not turn it own if there is a problem. The same with whom ever provide the electrical service.

These are visual and intelligent things you can do yourself without the use of home inspector.

Now you will find the grass is probably not cut and over grown, the flower bed is overgrown, the property might need painting, don't get excited this might be hidden equity.

Now if you decide to make an offer on the property make sure you include that the offer is contingent upon a professional inspection and any repairs over a certain dollar amount killls the deal unless the lender decide to cover the repair cost either with a reduction in the price or money to make the repairs.

Take pictures and have your real estate agent present them when making the offer.

If your real estate agent don't want to submit your offer, find another real estate agent. These are reasonable contingents to place in an offer. Most real estate agents will tell you that the lender will not consider contingencies and they are selling the house in an as is condition, but you will never know unless you ask. Simply remind the agent that it is his/her responsbility to present each offer to the client.  

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

"FIGHT ON"

Answer 8

none now and its going to get better for the buyer...

walkaways are the new thing/ buy one before it gets vandalized!

Answer 9

Carrie some drawbacks would be additional costs to repair. As most have told you, you should have a whole house inspection done by a certified inspector, on any home you buy.  What you might keep in mind on foreclosures, if they couldn't afford to make the payments, what other maintenance type items did they not take care of, beyond what you can see when you walk through.  Some can be good buys.  You migh consider looking at short sales as well.  Most short sales are being lived in and cared for.

Answer 10

Not knowing what you are doing, and buying for more then you should. Often these houses are in disrepair, and the repairs need to be taken into account in the purchase price.

Also, the market value needs to be well known. My definition of market value is what a house can be sold for within 90 Days On Market (DOM).

You also need to be familiar with the way in which you are buying a foreclosed house - there are a number of different ways, and each has its pros and cons.

Answer 11

I just bought a forclosed home!! The only drawbacks that I see is that mose need a little TLC and sweat equity to acheive the deam home. BUT, typically you get forclosed home cheaper so it it sooo worth it. Just make sure you get a home inspection (about $300) and you are good to go. In my opinion I think forclosed homes are the way to go. Your county should have a sherriff website that has all of the houses that are getting ready to be forclosed and those that have already so if you keep looking on there you can find out when some good forclosed homes will be coming on the market! If you ever need any help send me an email.

Answer 12

the people that are being foreclosed on are probably very frustrated and will take anything out of the house that they legally can like carpet window coverings sower heads ext. this can get expensive but on the other hand if you wanted to change them all anyway it can be a good thing. also when buying a foreclose keep in mind the bank just wants their money they don't care about the people losing out so make multipul low offers a few times so the bank can say look at the paper trail we tried to get as much as possible for this house but this is the best offer