to buy a foreclosure, or not to buy a foreclosure

[Shaftatplanetquake]

Is there any reason why it should be avoided? There is a house available that is about 25% less than it should be. Its listed at 87,900. Houses on this street go from about 105,00 to about 135,000. This particular house needs carpet, a door, wall repairs, and paint. All of those things are really minor, except the carpet, which will probably cost about 2k. It was built in 2004.

Should I run away? Is there some difference in the buying process that is going to result in me getting screwed? BTW this is the state of South Carolina, in case anyone was wondering, as I know real estate details differ state to state.

Thanks

 

[Demon-Xanth]

It'll take longer. My short sale house took 6 months to close. If you can wait, why not? I'm happy.

 

[slsmnaz]

be sure to get an inspection to make sure that's all you will have to fix

 

[Shaftatplanetquake]

I'm pretty sure I'm required by law to have an inspection here in SC.

 

[swbsam]

Originally posted by: Demon-Xanth
It'll take longer. My short sale house took 6 months to close. If you can wait, why not? I'm happy.

Not to thread-jack, but what exactly is a short sale? Me and the wife are looking for investments (multi-family units) and "short sale" is thrown around a lot.

 

[darkswordsman17]

Do you mean 25% below current value or 25% below what it used to be?

 

[Shaftatplanetquake]

Well, i mean 25% below current value. But what is current value? Nobody really knows. Real estate has not gone down here in SC, we haven't really felt much more than a 1 or 2 percent drop.

A short sale is when you buy a property from someone and you are buying it for less than they owe. Since the foreclosure is already owned by the bank (in this case), I don't think its a short sale. Maybe I'm wrong, I'll find out tomorrow when I talk to the broker.

 

[dandruff]

Originally posted by: Shaftatplanetquake
Is there any reason why it should be avoided? There is a house available that is about 25% less than it should be. Its listed at 87,900. Houses on this street go from about 105,00 to about 135,000. This particular house needs carpet, a door, wall repairs, and paint. All of those things are really minor, except the carpet, which will probably cost about 2k. It was built in 2004.

Should I run away? Is there some difference in the buying process that is going to result in me getting screwed? BTW this is the state of South Carolina, in case anyone was wondering, as I know real estate details differ state to state.

Thanks

1. where did you find it? if its on bidselect then see if you can wait till its goes to daily deadline ... i have been avergaing 15-25% below listed price as successful offers ... again ymmv but u need to tell us where u found it HUD / bidselect / REO etc. it just takes longer but it the same process ... u get title insurance blah blah ...

2. its 2004 so its built to newer codes (i hope) so less worries there

3. get a agent to do mls/ comps of houses sold in the past 3 months in that street / subdivision (dont go by zillow or word of mouth or current listings) ever !

4. i would offer 72,527

5. understand u r buying as-is so inspection is must ... ($250 here in KC) ... if inspection finds something biggie, u can always backout WITHOUT even losing your earnest money deposit ...

6. hth! i do this for living / architect / slumlord fwiw ... good luck!

 

[Shaftatplanetquake]

Since you guys are asking...

111 Perry Oaks Lane 29229

I found it by searching on google for houses in columbia, SC. I am pretty sure I made my way to scforeclosures.com by looking at a house on realtor.com (after doing the google search), then calling a place about a listing. They gave me the scforeclosures.com URL and thats where I am now.

Does that help?

Thanks

 

[Demon-Xanth]

A short sale is done usually to avoid a foreclosure. It's when the bank takes a loss and the homeowner walks away with nothing. In my case the sellers owed $248k, but the sale price was $195k. So the bank took a $50k loss.

 

[torpid]

If it's a foreclosure then you need a very thorough inspection. Maybe even specialists should be brought in to look at infrastructure. They are not required to disclose issues and the house will be sold "as is" without any potential fixes.

 

[Cuda1447]

Anyone have any statistics on how long a shortsale and/or foreclosure takes on average. I'd really like to know as I'm in the market just like the OP. Difficult thing is I'm trying to time signing the mortgage with when my lease runs out on my apartment. I can't really afford to pay a mortgage and a lease, but at the same time I don't want to wait any longer than i have to. Eh, its a damn tricky game.

 

[Shaftatplanetquake]

Originally posted by: torpid
If it's a foreclosure then you need a very thorough inspection. Maybe even specialists should be brought in to look at infrastructure. They are not required to disclose issues and the house will be sold "as is" without any potential fixes.

How do I go about finding the best inspector thats gunna really work hard for me?

 

[spaceman]

IS PLANETQUAKE STILL AROUND!>?!

 

[amdskip]

Looks like a nice place to me for a great price.

 

[TheKub]

To all the people putting extra emphasis for an inspector because its a foreclosure, is there a particular reason that its more risky vs just buying a regular house? I mean even if it wasn?t a foreclosure if you didn?t hire an inspector or got an incompetent one and they missed something once the paperwork is signed your SOL either way. Just because someone couldn?t afford the house doesn?t mean that it must have some hidden lurking problem with it. Now I?m not suggesting that you shouldn?t have an inspector it just seems that there is some extra push for one just because it?s a foreclosure when to me you should treat it just like any house purchase.

 

[Shaftatplanetquake]

Originally posted by: TheKub
To all the people putting extra emphasis for an inspector because its a foreclosure, is there a particular reason that its more risky vs just buying a regular house? I mean even if it wasn?t a foreclosure if you didn?t hire an inspector or got an incompetent one and they missed something once the paperwork is signed your SOL either way. Just because someone couldn?t afford the house doesn?t mean that it must have some hidden lurking problem with it. Now I?m not suggesting that you shouldn?t have an inspector it just seems that there is some extra push for one just because it?s a foreclosure when to me you should treat it just like any house purchase.

Yeah, how bout that?

Originally posted by: torpidThey are not required to disclose issues and the house will be sold "as is" without any potential fixes.

^^ there is torpid's answer... Are "they" required to disclose issues on other houses? Are you saying, torpid, that with a foreclosure, the contract is gunna be written up differently and I can't declare contingencies? Is it a warranty thing, and I can't get one with a foreclosure? Help me out here, with some more detail. TheKub is on to something here.

 

[SearchMaster]

Originally posted by: amdskip
Looks like a nice place to me for a great price.

Heh - I like the brick ranch above it for $63K, but I'm not a big fan of the vinyl siding look. The prices are certainly attractive though.

 

[Shaftatplanetquake]

I have a motorcycle, so I need a garage. But yeah, other than that, the ranch looks great. Its older, though.

 

[Shaftatplanetquake]

Oh, and that ranch is in a really crappy neighborhood. Constant gangster music at 2:00 AM is not something I enjoy (often).

 

[slsmnaz]

Originally posted by: TheKub
To all the people putting extra emphasis for an inspector because its a foreclosure, is there a particular reason that its more risky vs just buying a regular house? I mean even if it wasn?t a foreclosure if you didn?t hire an inspector or got an incompetent one and they missed something once the paperwork is signed your SOL either way. Just because someone couldn?t afford the house doesn?t mean that it must have some hidden lurking problem with it. Now I?m not suggesting that you shouldn?t have an inspector it just seems that there is some extra push for one just because it?s a foreclosure when to me you should treat it just like any house purchase.

it's becoming more common for foreclosures to be in bad shape. The ones being foreclosed on have no reason to treat the house with care when they are leaving. Copper ripped out for scrap, wiring ripped out, etc.

 

[torpid]

Originally posted by: Shaftatplanetquake

Originally posted by: TheKub
To all the people putting extra emphasis for an inspector because its a foreclosure, is there a particular reason that its more risky vs just buying a regular house? I mean even if it wasn?t a foreclosure if you didn?t hire an inspector or got an incompetent one and they missed something once the paperwork is signed your SOL either way. Just because someone couldn?t afford the house doesn?t mean that it must have some hidden lurking problem with it. Now I?m not suggesting that you shouldn?t have an inspector it just seems that there is some extra push for one just because it?s a foreclosure when to me you should treat it just like any house purchase.

Yeah, how bout that?

Originally posted by: torpidThey are not required to disclose issues and the house will be sold "as is" without any potential fixes.

^^ there is torpid's answer... Are "they" required to disclose issues on other houses? Are you saying, torpid, that with a foreclosure, the contract is gunna be written up differently and I can't declare contingencies? Is it a warranty thing, and I can't get one with a foreclosure? Help me out here, with some more detail. TheKub is on to something here.

My understanding, and IANAL or a real estate expert by any means, is as follows... someone please correct errors here...

When you buy a house "normally", the buyer is legally required to disclose certain things. This varies by state, but usually includes major repair work to infrastructure, recent deaths on the property, natural disasters, known major things in need of repair, and in general anything that might "seriously affect" a potential buyer's interest in buying the home. In this case an inspection is still important, but perhaps not quite as thorough of one is required since you can sue if they fail to disclose.

With a bank foreclosure this is not the case. The houses are sold as is, and worse, since they were foreclosed there is a chance that there is much-needed repairwork that they couldn't afford.

Some foreclosures have a completely preposterous thing wherein you can't even do a full inspection. I'm assuming this is not one of those.

Additionally, there may be some differences in terms of what you can do if the inspector actually finds something, but I don't know much at all about the differences there. I would assume you could back out of the contract minus a penalty still.

 

[dabuddha]

I'm currently in the process of buying a foreclosure. We got a really great deal. Was listed at 299 we offered 250 + 1 yr home warranty + seller providing 3% towards closing and they accepted. That's the good.

We originally got our ratified contract on Dec 5th and had a closing date scheduled for Dec 29th. I then moved the closing date to Jan 12th at my lender's request. After talking to everyone, we moved the closing date back to Jan 5th (everyone said that would be ok) Well, this past monday rolls around and of course, the seller does not have the documents ready. Those retards put the wrong name on the deed (what we were told) and would have to get a corrected deed signed by the seller first. So they eventually got it this past wednesday but now the retard seller realizes they don't have the power of attorney document on file (The bank is having a trustee sell their properties for them). So I'm sitting here now waiting for the idiots to get the document sent over to my title company. The lawyer said he can go ahead and do the closing if they say the document is in the mail but they haven't responded. Meanwhile my family is living out of boxes right now since everything is completely packed in our apartment.

So that's my only experience with buying a foreclosure But yes, definitely get an inspection done and also drive around the neighborhood at night too.

EDIT: Ours was sold AS IS as well. There are few things here and there that need fixing but nothing major. The home inspection will reveal everything you need to know. Cost me about 300 bucks but well worth it. Also, this was the 9th house that we had looked at. Some of the other foreclosures were in pristine condition. One house had some animal feces smeared all over the upstairs carpets. One had mold growing all over the basement walls. Literally a wall of solid mold lol.

 

[Cuda1447]

Wow, Da... great deal man. I'm hoping I can get a deal where the seller pays toward teh closing cost for me. Affording the monthly payments isn't a concern for me (it'll probably be less than what i pay in rent) but saving up a substantial amount while paying for a wedding and just finishing school is difficult

 

[BoberFett]

My wife and I put an offer on a short sale home last week. No idea how long it's going to take, but I've heard that when Countrywide is the mortgagee (as is the case here) it can take a while. I really hope everything goes smoothly though, check out the built in theater in this place. http://www.zillow.com/homedeta...MN-55443/1845050_zpid/

Foreclosure is a different beast. Short sales usually include a seller's disclosure, while as has been mentioned a foreclosure will often be AS IS. Also, there's a difference if the foreclosure is final. If the home is bank owned, you only have to deal with them. If the foreclosure process has only just started, in many states there is a long redemption period. Here in MN it's 12 months. So if you're looking at something that just started the foreclosure process around here, depending on how long all parties want to drag it out, you could wait up to a year.