First-time buyer, curious about foreclosures

cattmanSeptember 14, 2008

I'm looking to buy my first home at some point in the next few months. I see a ton of foreclosures in the part of the country where I wish to live, but don't know anything about that process (or really homebuying in general).

I see a lot of posts on here about how angry foreclosees and neighborhood thieves often strip these homes, so I know inspection is doubly important.

I wonder if these are the homes that can have multiple liens on them, and where I would turn or how I would be able to discover the full "credit baggage" of a home.

And won't a realtor have a particular incentive to be unhelpful to me if I'm shopping foreclosures, since the house is probably selling at a greatly reduced rate?

Thanks - input much appreciated!

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popeda

Most foreclosure homes end up with realtors, at least in our part of the world. So there's not too much different in finding one--find a realtor, use realtor.com or some such site.

The home inspection is important, but the house might be sold "as is" meaning your inspector told you what is wrong, but no one is going to fix it up front.

You should get a title policy that gives a clear title at closing, so you shouldn't have to worry about liens.

Realtors like sales; they might prefer big sales, but you will find a realtor who understands the role of price in your search, and they will be happy to make a sale.

As first time buyer, don't forget to take your tax credit come tax time--up to $7500. That should also sweeten the deal.

Although there are foreclosures in our area, they seem to take a while for the bank/mortgage company who owns them to act and turn over to realtor. Then it seems the realtor isn't given much leeway to lower prices and get the puppy off the street. Just my observation. After searching through some with my son (another 1st time buyer), we ended up with a new home contract because it seemed even foreclosed pre-owned homes wanted the same per sq. ft. or almost the same regardless of how much work was probably going to be needed in the older home. Maybe values are different where you are looking. We are just constantly amazed at what people ask and I suppose, get, for existing homes.

    Bookmark   September 16, 2008 at 9:25AM
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ladynimue

We recently put in an offer on a bank owned property (foreclosure). The home had been partially stripped - mini kitchen in the basement was gone, as well as the basement bathroom sink. The thermostats had been replaced with old versions. All the kitchen appliances, towel bars and ceiling light fixtures (chandeliers) were gone. A pet had been left in the home and all the carpeting stunk.

Our agents was happy to show us bank owned homes and they really aren't all that greatly reduced in price. A bargain can be found but you will need both luck and patience.

We made a full-priced offer but asked for a carpet allowance. Then two other offers came in. A week after we made our offer the bank finally replied and asked for best and finals from everyone. It's now been another week and a half and we haven't heard back. Our agent thinks the bank is going to offer the home at auction instead, in hopes of getting a higher price. We ended up buying another house.

hddana is right about it taking a long time (banks are in no hurry at all and you cannot give them a deadline to reply) and about the banks seeming to want a high sq ft. price.

    Bookmark   September 16, 2008 at 10:38AM
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