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Old 08-22-2008, 09:09 AM
 
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Can anyone provide any information on the level of difficulty in purchasing a foreclosed home? There is an agent listing a foreclosure for sale on a home that is in a good location. The house has some disrepair evident from the outside, who knows what is on the inside (do they do showings for this type of sale?). But it is incredibly cheap and near good schools, etc.

Can you get a normal mortgage, use fha, and put down a typical down payment? Or do they want you to pay for the whole thing up front? I have emailed the agent but still no reply as yet.

This is in NC.

Thanks for absolutely anything you can tell me - it will all be helpful. We have never purchased a home, so this isnt for investment, and we have zero purchasing experience to draw from.

jc
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Old 08-22-2008, 09:13 AM
 
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Just received an email from the agent that had listed this house. The only photo available was an outside photo, so I had asked about the condition, is it livable as it stands, and so on. Her exact and only response: "this property is under contract". This was sort of a chilly, less-than-helpful reply to my email, b/c it had several questions I was hoping to get answers to.
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Old 08-22-2008, 09:21 AM
 
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I had RE tell me the place looks great, ready to move in.....while holes were in the wall, dirty, damaged, etc....they probable never were inside the home...or we know how their home will look like.
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Old 08-22-2008, 09:54 AM
 
Location: central, between Pepe's Tacos and Roberto's
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To answer your original question, buying a foreclosure or REO is pretty much the same as buying a privately sold home. Normal financing will absolutely apply. REO's are sold as-is though, and although out here the banks are conceding to seller concessions I can't say that they are everywhere. It can also be a much more trying buying experience, since the seller is a large corporate structure and operates like one even in this sense (lakc of communication, mixed signals, etc.).
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Old 08-22-2008, 10:06 AM
 
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Thanks guys. Appreciate the responses. By-the-way, what does REO stand for, just out of curiosity?
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Old 08-22-2008, 11:17 AM
 
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"Real Estate Owned"

We just bought a foreclosure last month and it was easy peasy!
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Old 08-22-2008, 11:48 AM
 
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Katzy, do you know if fha loans still apply? I was also wondering about the as-is condition of a foreclosure - if there are any major issues, do lenders have concerns loaning on a home in need of repairs?
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Old 08-22-2008, 12:10 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,079 times
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FHA loans absolutely still apply. As long as the repairs are cosmetic in nature as opposed to mechanical or structural then there should be no issue with an FHA appraisal. That being said, there is always the FHA 203k option, which is an FHA rehab loan. This will allow you to borrow the amount, up to $30,000, needed to bring the home up to livable standards.
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Old 08-22-2008, 01:51 PM
 
Location: Pennsylvania, USA
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Quote:
Originally Posted by jctx View Post
Just received an email from the agent that had listed this house. The only photo available was an outside photo, so I had asked about the condition, is it livable as it stands, and so on. Her exact and only response: "this property is under contract". This was sort of a chilly, less-than-helpful reply to my email, b/c it had several questions I was hoping to get answers to.
Hi,
She didn't answer your questions because hte house is pretty much sold.

Foreclosures are sold 'as is' and the bank makes no guarantees that anything is working and/or functioning. You put in your offer, it gets accepted and i do believe you can have an inspector in.. however, the water to homes in foreclosure are usually turned off. I do not know what your rights are to having a full inspection on a foreclosed property that is listed. you'll have to check with an attorney in your state.

Most often people who left their homes because a bank foreclosed are angry and upset and take it out on the house.. in extreme cases cement is poured down the drains..etc... but that is extreme. Most is usually cosmetic damage, appliances taken etc.
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Old 08-22-2008, 03:30 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
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As Daddys///M3 said.... as long as the repairs are cosmetic in nature any loan program will apply. There are a lot of buyers looking at foreclosures now and the bank really is concerned about major items that affect the security, safety or saleability of the property.

If there is no working heating/AC you will not be able to get an FHA or conforming loan here in NC. Same goes for broken windows or doors, roofs, structural damage, etc. The lender wants to know you can go into the home on day 1 and live there if necessary. If it needs new carpet, paint, yardwork or other cosmetic or minor items that will not prohibit you from living in the home safely then you should be okay. There is the FHA 203(k) program that was mentioned that can let you make some repairs, but major problems are usually not allowed under this program either.

On foreclosures it is more important than ever to have a good Realtor that has experience with foreclosures. They can give you an idea (or run it by a loan officer) of whether the home is acceptable. REO homes also usually have special contract addendums that decrease your rights... such as "as is" where they will make no repiars, less options to back out of the offer and per diem charges if the closing is delayed. I have some decent Realtors mess up on the addendums and put their buyer in a difficult position.

There is really no benefit in searching for homes alone (other than avoiding some annoying Realtors) and a lot to gain from having a professional advising you. If the foreclosure route is your choice, find a local agent that knows the market to help you.
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