Originally posted by: Xavier434
I should elaborate.
First, I am currently looking into getting a starter home that has good enough space, has a good layout, and is 3/2 or 3/3. Right now, those are running at about 260k on average. Second, I have not gone looking at homes beyond internet ads and I am living in an apartment with my family of one child (second one will be on the way soon enough). If I can swing a foreclosure that has never been lived in and offers me what I want at a better price than I will be happy as a clam. What I fear is buying a foreclosure that was previously owned by someone who was irresponsible and that irresponsibility played a part in the quality of their home. I realize such risks are involved in any house that has been lived in, but I figure that the odds of such things increase if there are signs of financial irresponsibility. So, I guess the idea is to try and get a foreclosed house that doesn't involve those risks. Now, how I go about distinguishing one from the other is something I do not know much about other than just going to each place and taking a look.
You aren't really looking at a 'starter' home . 3/2 and 3/3's are many's end game. A starter home would normally be a resale in an older neighborhood and a 2/2 or 3-4/1. Usually bathrooms are a luxury in starter homes with the emphasis being at least bedrooms for everyone.
$260k still seems a bit high for a starter home in broward. My home in Palm Beach County was $265k about 6 months ago...out of that $265k about $10k went to credit cards, loan costs and my insurance...it's harder to do that now though. This was an older home in a nicer established neighborhood. For around that price I could have bought an equal sized townhome in a newer HOA...but that is not what I wanted. I wanted no HOA, a detached residence and something I could at least get a feel for what the neighbors were like.
The townhouse option would have put me in places which are still under construction and mostly vacant.
I am thinking though you are limiting yourself to brand new homes though. If that's the case then things still have room to go down.
I am not sure what problems you foresee with a foreclosure homes construction. These were built without the assumption that the house would be lost. Build quality is equal to any other home...a lot of times these homes were better optioned as well. You are only looking at lack of maintenance which on a new home is really limited to the yard itself, maybe the swimming pool if equipped. Hardly anything permanently screwed up though.
Occassionally foreclosures will be missing appliances or have some vandalism. Most people buying them are assuming they will at least have to repaint, do carpeting. Your friend the inspector would be who to leverage on these.
Unless you are driving around though you aren't going to see the best deals. This is really something that should be done 2-3 months prior to when you are looking to contract on something. Even 6 months out things change significantly enough that any research is outdated. You also have to sift through the hundreds of people still listing their homes with no intention of wanting to sell. They are still hoping to 'win the lottery'.
In general though the skeletons in a older home will be greater than any 2 year old foreclosed new home. Still that said, almost none of them are the end of the world.
I'd first figure out budget, then figure out what needs you have, then the wishes. Once you know that then you can find out what sacrifices you will have to make or if the situation is a reality. This is really the best way to pick a home or the next rental. There are a lot of steals on rentals now with many homes being FOR SALE/FOR RENT...sellers are desperate. Many that are FOR SALE/RENT do have exclusions though that your lease is over if a contract is written and that they seller / landlord reserves the right to show the property at any time with 24 hour notice (you don't have to agree to it...the law just states that they give you 24hours prior to their entry).
I know a ton of people renting places in the $300-500k range for $2000 and less a month, mostly between $1-1.5k. The owners are losing their asses but can't find buyers.
My last rental was $625 a month in the same neighborhood. Buying a house really cost me more overall, but having your own place you can customize to your liking outweighed the savings to me after 5 years of renting.