to buy a foreclosure, or not to buy a foreclosure

[TheKub]

Originally posted by: Shaftatplanetquake

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? ...

I guess I always concider every sale to be "as is" becasue its all up the the seller. You offer $XXk dollars and a requirement that they fix XXX. They tell you no\piss off\etc you walk or offer $X less and dont put the fix it requirement. Besides even if something doesn't get disclosed its still a he said she said thing you would have to proove that they knew about it in the first place, to me the requirement to disclose is nothing more than a warm fuzzy feeling. That being said get it inspected!

Originally posted by: slsmnaz
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.

I don't deny that but it doesnt exactly take a rocket scientist to see crap smeared on carpet and walls ripped open and gutted. I would imagine that the motivation for that behavior is to get back at the bank and the best way do that is by damaging the resale value of the house in the most obvious manor, secretly and subtlety damaging the house wouldn't effect the resale unless it was detected by all inspectors. As for finding a good inspector the best bet is word of mouth.

 

[Xavier434]

One thing I can add to this thread is that a bank owned (REO) foreclosure is usually a lot easier and faster to close. A pre-foreclosure (also called a short sale) often takes a lot longer because you still have the original owner who is sort of involved like a middle man. This middle man technically has no power because the bank still has the final say with everything important, but he/she can make things more difficult by not doing what they are supposed to do by the book with paperwork and what not. By going after a bank owned foreclosure, you can think of it has taking out the useless middle man.

 

[TheKub]

Originally posted by: Xavier434
One thing I can add to this thread is that a bank owned (REO) foreclosure is usually a lot easier and faster to close.

LOL, that actually slipped my mind I had a friend put a bid on a forclosure in Lansing last fall, everything was good but 1-2 days before the paperwork was going to be final the city\county seized the house from the bank due to not paying the taxes. Which apparently ment he would have had to start the whole process over as well as add 3 months of other crap.

 

[NoShangriLa]

Hold on to your $ for now, because word on the street suggest that the rest of 2009 housing market is going to be worst than 2008. If un-employment trend keep going up as we have seen in Nov/Dec of 2008.

 

[rudder]

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.

And keep in mind if the house needed say $30,000 in repairs because a disgruntled homeowner tore the place up... that is something you cannot finance. YOu will need that cash. YOu can still come out ahead if even this place is torn up... but just something to consider.

That and the former homeowner may stalk you for the next 20 years pissed that you stole his dream home.

 

[DayLaPaul]

Originally posted by: TheKub

Originally posted by: Shaftatplanetquake

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? ...

I guess I always concider every sale to be "as is" becasue its all up the the seller. You offer $XXk dollars and a requirement that they fix XXX. They tell you no\piss off\etc you walk or offer $X less and dont put the fix it requirement. Besides even if something doesn't get disclosed its still a he said she said thing you would have to proove that they knew about it in the first place, to me the requirement to disclose is nothing more than a warm fuzzy feeling. That being said get it inspected!

Originally posted by: slsmnaz
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.

I don't deny that but it doesnt exactly take a rocket scientist to see crap smeared on carpet and walls ripped open and gutted. I would imagine that the motivation for that behavior is to get back at the bank and the best way do that is by damaging the resale value of the house in the most obvious manor, secretly and subtlety damaging the house wouldn't effect the resale unless it was detected by all inspectors. As for finding a good inspector the best bet is word of mouth.

I think the motivation has more to do with them wanting to get as much value out of their house back before the bank takes it. Before the house is foreclosed, they legally own all that copper, light fixtures, door knobs, air conditioner, garage door opener, etc. Why give it to the bank for free when you can take it with you to your next house or sell it? I think that's the mentality more so than anything.

 

[Strk]

Originally posted by: 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.

The bank isn't always the one who is going to take the hit.

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.

Well, as others have said, in the case of a foreclosure, anything of value has a tendancy to be pulled out. Depending on the people leaving and the neighborhood, it can be pretty severe. Someone already mentioned it, but in some cases people will even pull the coppers pipes and wiring. That happens frequently if the house has been abandoned for a while. I'd expect to buy all new appliances as well.

 

[Xavier434]

Originally posted by: NoShangriLa

Hold on to your $ for now, because word on the street suggest that the rest of 2009 housing market is going to be worst than 2008. If un-employment trend keep going up as we have seen in Nov/Dec of 2008.

The advantage of waiting or buying now greatly depends on where you live.

 

[BoberFett]

Originally posted by: TheKub

Originally posted by: Shaftatplanetquake

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? ...

I guess I always concider every sale to be "as is" becasue its all up the the seller. You offer $XXk dollars and a requirement that they fix XXX. They tell you no\piss off\etc you walk or offer $X less and dont put the fix it requirement. Besides even if something doesn't get disclosed its still a he said she said thing you would have to proove that they knew about it in the first place, to me the requirement to disclose is nothing more than a warm fuzzy feeling. That being said get it inspected!

Originally posted by: slsmnaz
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.

I don't deny that but it doesnt exactly take a rocket scientist to see crap smeared on carpet and walls ripped open and gutted. I would imagine that the motivation for that behavior is to get back at the bank and the best way do that is by damaging the resale value of the house in the most obvious manor, secretly and subtlety damaging the house wouldn't effect the resale unless it was detected by all inspectors. As for finding a good inspector the best bet is word of mouth.

As is relates to liability after closing. If the seller was aware that the basement floods every spring they have to disclose that. If they don't there are legal remedies.

 

[BoberFett]

Originally posted by: Xavier434

Originally posted by: NoShangriLa

Hold on to your $ for now, because word on the street suggest that the rest of 2009 housing market is going to be worst than 2008. If un-employment trend keep going up as we have seen in Nov/Dec of 2008.

The advantage of waiting or buying now greatly depends on where you live.

True.

Some markets are more stable than others. The markets that bubbled the greatest still have some time before they hit the bottom. The midwest wasn't nearly as large a bubble as the coasts so people buying there right now, while they may still lose some immediate value, if they plan to stay for 15+ years probably won't feel the same hit.

If you bought today in Miami, it could be a long time before property values came back up to what you paid today. Something in the middle of BFE in Nebraska is probably pretty close to the bottom already.

 

[Shaftatplanetquake]

It turns out that the house had lots of small holes in the vinyl siding, but only on 2 sides of the house. When I walked next door and asked the neighbor (who was an older gorilla, thronged by a couple of fellow gorillas, and had at least 3-4 additional gorillas coming and going from his house every hour) what may have happened, he formulated a story that it must be kids that have done it, throwing rocks.

That was believable. He went on to say that they would walk through between the two houses on the way to "the store". That doesn't really make sense, since there is a huge drainage area behind the house that is about 30 feet deep. But allright, theres an explanation at least. And he said that since he started calling the cops when he was having trouble with the kids, the problem has went away. No problems for 6 months.

5 minutes later, a gorilla goes out his back door and fires his beebee pistol at the telephone pole behind their house, and I hear it bounce off the pole.

Its a near certainty that it was this gorilla that created the holes, and there is a reason why this house is not selling even at such a low price.

 

[Demon-Xanth]

Originally posted by: Shaftatplanetquake
It turns out that the house had lots of small holes in the vinyl siding, but only on 2 sides of the house. When I walked next door and asked the neighbor (who was an older gorilla, thronged by a couple of fellow gorillas, and had at least 3-4 additional gorillas coming and going from his house every hour) what may have happened, he formulated a story that it must be kids that have done it, throwing rocks.

That was believable. He went on to say that they would walk through between the two houses on the way to "the store". That doesn't really make sense, since there is a huge drainage area behind the house that is about 30 feet deep. But allright, theres an explanation at least. And he said that since he started calling the cops when he was having trouble with the kids, the problem has went away. No problems for 6 months.

5 minutes later, a gorilla goes out his back door and fires his beebee pistol at the telephone pole behind their house, and I hear it bounce off the pole.

Its a near certainty that it was this gorilla that created the holes, and there is a reason why this house is not selling even at such a low price.

Neighbors can really make or break a place. You can't make them change.

 

[Shaftatplanetquake]

Yeah, I will not buy that house. It doesn't matter what price I could get it for.