Foreclosed home question?

Question

Are foreclose homes cheaper to buy? if so how much?

Answer 1

yeah, they are cheaper to buy.

it depends on the area.

Answer 2

Yes.

A forclosed home means that the bank owns it.  Banks make money from mortgages when borrowers pay the bank.  If a home is foreclosed no one is paying the bank for that loan.  The bank is losing money everyday on that foreclosed home.  They need to sell it as fast as possible to get money out of it so they usually will take less money.  They have limits, they can't just give it away, but they're generaly more motivated to sell.

Answer 3

Not always.  Banks have already lost money on these homes and while they don’t want to sit on them forever, they’re certainly not going to give them away. Foreclosed homes are usually priced in accordance with their current market value.  The big savings usually comes from sacrificing condition. A home that needs major updating and/or repairs naturally isn’t worth as much as one that doesn’t no matter who owns it. If you’re going to do a ton of work to a house, you might not save all that much.

I live in a 1950s subdivision where there’s not much variation between homes other than updates/condition. Foreclosed homes are selling for just as much as the equal condition privately owned homes.  I bought one of the foreclosed properties. It wasn’t an easy road. Banks aren’t keen on negotiation, and without my buyer’s agent this one would have walked all over me. We had to accept the house in its present state (that doesn’t mean we forwent an inspection!!!), and without the benefit of a seller’s disclosure.

I’m happy with mu purchase, but I want to stress that I did not focus solely on foreclosed homes. I told my buyer’s agent what I wanted in a house in terms of amenities & price, and let him show me the options. It just happened the right house was bank owned. I would suggest you do the same. It can be a lengthy process to get a contract completed with a bank.  

Once you get out there and look, you just might realize that privately owned homes are an equally good deal – and much easier to acquire.  

Answer 4

yes as the bank wants to be made whole on the loss if at all possible and will accept a reasonable offer. Every house has a different loan amount owed it is just a process you must go through to find a great deal

Answer 5

Typically, yes.  But you also run the risks doing so.  The seller has no idea what the condition of the home is.  If the water heater has busted and flooded the house 5 times, you won't know.  If the roof was replaced, or leaks, you won't know.

The price difference varies greatly.  It depends on the condition of the home, how long it has been on the market and the motivation of the mortgage company to sell it.  I've seen them much cheaper, and I've seen them at full market value.