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Foreclosure listings


Hammer
Hey all - my wife and I sold our house recently with the intent of building a new one. Then, our friends purchased a home that was in foreclosure for dirt cheap (her mother works at the bank that it was foreclosed at so she got a good tip on it). I don't have a parent in banking but the idea of purchasing a home out of foreclosure is very appealing to me. Has anyone here ever gotten a listing of these homes? Are there specific places that are more reliable for these lists? I'm not usually the type to prey on others misfortune...but money is money.
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Most county sheriff offices will post scheduled sheriff sales online. You wouldn't actually buy the home at sheriff sale unless you are really ballsy but you would at least have a heads up on properties that are going through the process. Once the bank buys it back at Sheriff Sale you can approach them about it. Normally local banks are much easier and quicker to deal with than the national guys
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I've considered going that route before but wonder what percentage of foreclosed homes have extensive damage. It seems to me that the previous owners could completely trash the place if they desired without any consequences.
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Two weekends ago my girlfriend's family was talking about this. One of her aunts works at a bank and deals with this. Most banks will not let you look inside the house before purchasing it. Sometimes there's nothing wrong but often the previous owners strip the wiring for copper, do extensive damage out of spite, or just do nothing to clean it up. I agree it sounds intriguing but seems like a big risk.
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Hey all - my wife and I sold our house recently with the intent of building a new one. Then, our friends purchased a home that was in foreclosure for dirt cheap (her mother works at the bank that it was foreclosed at so she got a good tip on it). I don't have a parent in banking but the idea of purchasing a home out of foreclosure is very appealing to me. Has anyone here ever gotten a listing of these homes? Are there specific places that are more reliable for these lists? I'm not usually the type to prey on others misfortune...but money is money.

 

Not to take this thread off track but what your friends mother did is highly illegal. This is equal to insider trading.

 

As for buying a foreclosed home it is a big gamble on what you are going to get. It is like taking a gun out aiming it at yourself and pulling the trigger and seeing what happens.

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Two weekends ago my girlfriend's family was talking about this. One of her aunts works at a bank and deals with this. Most banks will not let you look inside the house before purchasing it. Sometimes there's nothing wrong but often the previous owners strip the wiring for copper, do extensive damage out of spite, or just do nothing to clean it up. I agree it sounds intriguing but seems like a big risk.

 

Property Wars ftw.

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Hey all - my wife and I sold our house recently with the intent of building a new one. Then, our friends purchased a home that was in foreclosure for dirt cheap (her mother works at the bank that it was foreclosed at so she got a good tip on it). I don't have a parent in banking but the idea of purchasing a home out of foreclosure is very appealing to me. Has anyone here ever gotten a listing of these homes? Are there specific places that are more reliable for these lists? I'm not usually the type to prey on others misfortune...but money is money.

 

Not to take this thread off track but what your friends mother did is highly illegal. This is equal to insider trading.

 

As for buying a foreclosed home it is a big gamble on what you are going to get. It is like taking a gun out aiming it at yourself and pulling the trigger and seeing what happens.

 

From what I've heard, it happens 90% of the time with foreclosures.

 

Anyway, without a connection its high risk, high reward. If you are in a position to do something like this, where you have a lot of experience and a team to help its doable, but if you are the little guy I think you are out of luck. The idea was to help people during a poor economic climate, but it seems in my market its just making the rich richer.

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Hey all - my wife and I sold our house recently with the intent of building a new one. Then, our friends purchased a home that was in foreclosure for dirt cheap (her mother works at the bank that it was foreclosed at so she got a good tip on it). I don't have a parent in banking but the idea of purchasing a home out of foreclosure is very appealing to me. Has anyone here ever gotten a listing of these homes? Are there specific places that are more reliable for these lists? I'm not usually the type to prey on others misfortune...but money is money.

 

Not to take this thread off track but what your friends mother did is highly illegal. This is equal to insider trading.

 

As for buying a foreclosed home it is a big gamble on what you are going to get. It is like taking a gun out aiming it at yourself and pulling the trigger and seeing what happens.

 

That is not insider trading. It also isn't illegal. It happens all the time and most of the time the "tip" is just a simple hey this house is on the market and is a good deal. I have clients buying home in Vegas where the bank flat out tells them what the bank was owed, the entire purchase history, what is the minimum they are willing to take ,all outside of what the listing is for and while a bidding war is going between buyers.

 

Buying a foreclosure doesn't always mean you can't look at it. My clients in Vegas have walked through every bank foreclosure and short sale they have bid on. My brother buys foreclosed homes in Wi all the time (he is a contractor and flips them so he actually prefers the ones with damage) and has walked through everyone of them. He did walk away from one in Madison where the bank had stopped paying the electric bill and had the power shut off after the owners vacated only to find water had leaked into the basement and with no sump pump, no air flow, the interior was completely covered with black mold. (my guess is someone got and earful or a policy got changed quickly as trying to save a couple buck cost tens of thousands). My brother has some incredible stories about things they have found left behind in foreclosed houses he has purchased, often times embarrassing or illegal things that one would think the owners would take with them or at least dispose of before bankers, realtors, appraisers, buyers, etc. walk through. I went to one closing with him where the guy selling walked away with a few thousand after the bank was paid off and they guy showed up at the house the next day to show off his "new" PT Cruiser. Basically the guy traded his worthless house but valuable lot for a used car since the sale price was about 1/2 the assessed land value.

 

When I got married 5 years ago my wife and I got a from a friend of hers that a near brand new home in their neighborhood was going through foreclosure. We walked through it only to find holes punched in the walls, part of the hardwood floor ripped up, etc. We didn't feel like dealing with the repairs and who knows what else the inspection would find so we passed. Amazing what someone will do on the way out of a $400,000 house that was nearly brand new. All it does is reduce the sale amount and increase the shortfall of the owner. But the bank had no problem letting us walk through it and seeing it as is.

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In the case of buying at the actual sheriff sale you really are going in blind as you aren't allowed to inspect the interior. Normally once the bank buys it at the sheriff sale it is listed in short order with a realtor and obviously if that is the case anyone can go through the property.

 

I work at a bank and it is true that most foreclosed properties are absolute dumps but I have never seen the horror story of a borrower just stripping the place naked. You almost definitely have to replace all carpets/flooring and more often than not the kitchens and bathrooms are a disaster. And obviously people that have their homes foreclosed on can't keep up with maintenance so things like windows, roofs, HVAC tend to need repair. Just hope it didn't get to the point of mold damage or structural issues.

 

We have customers that tend to buy foreclosures a lot and will give them a headsup when we have something; there is nothing illegal about it. Once the bank owns it they can sell it however they choose whether on the open market or a preferred customer. The only time it gets a little hairy is if a bank employee buys it and the home loan was sold on the secondary market. Otherwise everything is fair game.

 

In general I just wouldn't advise to buy a foreclosure unless you are really know what you are doing (I.E. have a background in construction). Costs for repair can escalate very quickly if you simply aren't prepared

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Yeah, often the bank is the only bidder at the sheriff sale which is why so many foreclosures end up being bank owned real estate. Even when the bank lists the property my brother has often found he is the only offer on the more beat up properties so he typically works the bank's asking price way down since they know there isn't a big market for the types of homes he buys up. These are one that sell for $50,000, he puts in $75,000 and sells off for $180,000+ because they are typically complete gut jobs. Banks don't even like to finance projects like that so an ambitious homeowner may be lucky to get enough financing to even buy the place but be hard pressed to get a HELOC or construction loan to do the necessary fix ups, updates, etc.

 

I would agree that many of the low priced foreclosures need substantial work, but even if not in foreclosure that area of the market probably needs updating and cosmetic repairs. I've been through a number of foreclosures that were just fine inside or at most needing a new fridge and stove. Some people just walked away after only a short time of ownership and didn't take out their anger or frustration on the way out.

 

I'd just reiterate what fondybrewfan said, make sure you know what you are doing if it looks like work is needed and you are probably better off letting the bank buy the property at the sheriff sale unless you know something about the house or owners already. You probably won't have a lot of competition when trying to buy it from the bank later but will get a chance to see the interior and have a home inspection. But there are a number of homes that were bank owned that just need some minor cosmetic work like paint or carpet like many older homes that get sold with an allowance for updates, only this time the cheaper price is just more of an as is.

 

From what I know and fondy probably knows more, short sale homes take longer as there is more negotiation and what the sell might think is fair the bank balks at, I've heard of lots of last minute hang ups and issues at the close with those types of purchases.

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As someone who does the foreclosing (but not as your attorney - note the disclaimer here....and this isn't legal advice!), I can echo a lot of what fondybrewfan already wrote. I regularly field calls from people who see foreclosure listings, and want to know what the bank intends to bid. If I know it, I will generally pass that information along; generally speaking, a bank would rather have the money from a house than the house itself. If they buy the house at sale, they have legal fees, broker fees, maintenance / upkeep, taxes, insurance, utilities, etc. The bank cannot arrange an inspection of the home for a prospective buyer, since they don't own it yet.

 

(If you're really interested, you may wish to look up the Defendant in the phone book, and seek permission to bring in a home inspector prior to the sale. It's in the foreclosed's interests to have an interested buyer, but not everyone can think rationally when being legally forced into giving up their home. Alternatively, it may be listed with a realtor, in hopes of finding a short sale buyer.)

 

That's a big part of the reason that the bank would consider a short sale. I can't say that a short sale takes 'longer,' since it's built into the process in Wisconsin; a lender can't foreclose on an owner-occupied (non-abandoned) residence for six months after getting their judgment. The short sale either occurs before a judgment is obtained, or during that "redemption period" between the judgment and a sale. Essentially, the bank weighs what they think the house 'should' sell for (less the projected costs to find a buyer at that price) against the short sale offer.

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