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In regards to foreclosures being a former meth-lab
The difference is that foreclosures are "as is, no warranty"... a non foreclosure has disclosure statements and you can sue if they don't disclose. Fixing a meth home is about $40,000 to have the hazmat guys remove all the drywall and insulation in their scuba suits.
PS, there is no way to "have it tested beforehand" on a foreclosure. The only way you can usually get inside is by breaking and entering (not recommended!) That is just one reason why they are a risk!
There are any number of circumstances where you can get into buying a home without a warantee...relocation outfits for instance...or a probate sale.
There are foreclosures and foreclosures. Here it is mostly a property that has been foreclosed and is being sold by the bank as a regular MLS listing. You can view it and inspect to your hearts content. As another poster pointed out the hassle level can be very high but it works otherwise. As I have said elsewhere "court house step" foreclosures are for experts...but buying a foreclosure is not a big deal otherwise.
Many meth houses are rentals and it is not certain the owner even knows that it was used for meth producton. You may have an action against the owner but you may not. Much rental property is held in LLC and such.
I would say that for most people it is not a good option as an investment, and it is really not a good idea as a residence.
First, you have to pay cash, so that takes most of the people out of the running right there. There are a lot of risks involved, and you could lose hundreds of thousands of dollars if you do it wrong. You also might have to deal with an eviction (maybe even someone very sympathetic like a single mom with kids or a destitute old lady).
If you do want to get a foreclosure, definately seek the help of professionals. Doing it all on your own (even if you are a great book learner, very smart, etc) is like trying to learn how to give yourself a root canal (even some realtors would be in way over their head). I would personally never buy a place without some professional help.
As a personal home they are a bad choice because they are spread out over the whole county, and you will have a hard time finding a place that you even like, let alone can renovate (and they are usually real S**t holes) and submit the winning bid. The only exception might be in one of the top ten markets for foreclosures where there are 50 or more places going each week.
Not always and not nessesarily
on HUD foreclosures you can get loans as in FHA
but there is certain criteria for those loans
check with a loan officer for more information
sometimes the foreclosures are actually new homes ...owned by good people who made bad decisions on their loans and now just cannot afford the mortgage payments
each foreclosure needs to be evaluated on a case by case basis.
on Hud homes they have already be inspected and an agent would be able to give you an indication of what is wrong with the house and about how much it will cost to repair it
Thank you all for the information. one more question it is it easier if the home is purchased from the bank ?
I would think if you were buying it from th bank as opposed to "courthouse steps" you would be able to make a loan for it
although i don't think I would go to the same bank to get the loan
Foreclosure laws vary by state, so there are really several right answers. The margins are also much different by type. Because most people can qualify for a HUD, they have little to any savings over standard "fixer-uppers" and I don't really consider them foreclosures (although I guess they really are).
I would also want to add that no one should base a decision as big (or as risky in the case of a foreclosure) on the advice of anonymous Internet postings! Use it as a starting point maybe, but seek out a pro when you are ready to make a move.
Who says you have to pay cash??? Maybe if it is a total wreck. Not all foreclosures are. If the property is in mostly habitable condition, you can get a regular conventional mortgage (especially with 20% or more down)
I have closed 2 in the last 3 months. Both properties were great deals and both borrowers got mortgages to purchase them.
We just bought a bank-owned foreclosure and it was as easy and as smooth as any other of our other, non-forclosure, home purchases.
I don't get some of the comments here? Cash only? Can't get inside the home to see the damage? Meth-labs? No warranty???
First, we had an inspection, and the bank had provided a termite inspection. They (the bank) had also completed a significant amount of work in the home prior to it even going on the market. New paint and carpet, through out, as well as new appliances. We were also given a one year home warranty, which also covered the in-ground pool.
We viewed it with our agent, as we would have viewed any other nonforclosure home. We submitted our offer (though, the offer process was slightly different because we had to use specific Fannie Mae/HUD forms). Our offer was accepted, and we had an inspection. They offered to pay for up to $1000 worth of anything that had come up on the inspection - but it was trivial items, so we let it go.
We closed in less than 29 days. We moved in.
We used a regular 30 yr fixed loan, with zero down - a good rate. Put $1000 down as earnest money, and even had the "sellers" (the bank) give us $3k in closing costs.
Very true Jen. There are going to be lots of these properties coming on the market and most will be eligible for secondary mortgage market financing (eg. 30 year fixed).
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) That is just one reason why they are a risk!
