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Old 11-11-2012, 06:56 AM
 
Location: Punta Gorda and Maryland
6,102 posts, read 13,060,618 times
Reputation: 1220

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Quote:
Originally Posted by mr&mrssunshine View Post
I am scheduled to clsoe on a bank owned home the end of this week....no one has paid the water for over 4 years and it has amassed nearly $3000 in penalties !!! The banks dont care about the minutia, as stated by HR the banks have already written the debt off.

as for 'viewing' foreclosed/bank owned etc properties , if you enter without the owners permision you are trespassing and breaking and entering ie committing a crime.....I belive there was a TV programme a while back where a crew hid inside a home and 'caught' a number of potential buyers/investors/realtors in the act....you do so at your peril
They have caught and locked up a lot of investors in Cape Coral that have entered the houses for "inspection" purposes. They are looking for anyone going in these houses, and the banks have security firms watching most of them. If they catch you you will be prosecuted - they think your their to strip the houses of appliances, lights, well pumps, hvac and other valuables - which has happened to many if not most of these houses.

Buying these houses is a huge risk, and unless you really know what your doing - you could pay a huge price. People have bid on houses - thinking they got a great deal - only to find their money only paid off the HOA dues, and they own nothing! Many have bought houses with Chinese / defective drywall, other have bought houses that have huge HOA dues, CCD fees, liens (from unpaid contractors), clouds on the title from a slue of sources, have mold, roof damage, and have been totally stripped out of all valuable, and various sorts of vandalism. Others have paid off only the 2nd mortgage or a line of credit, and not the first mortgage. Some have bought the mortgage, and found out the 2nd mortgage or line of credit has not been paid, and the foreclosure did not put the plaintiff in a position with superior rights over the other lien holders.
If you buy a house this way, you pay 100% cash the day you buy - and you have seconds to decide to spend tens of thousands if not hundreds of thousands of dollars - HUGE risk!! If you do decide to do this, it is important to know that you are bidding against investors that are sharks. They do a tremendous amount of research on each house they persue, know what they are doing, are will financed, and if you beat them. . . . you're gonna worry "what did I do to myself!"

If you buy a foreclosure or a bank owned property, you won't incur these risks, and you will get a clean insurable title. Even wise investors prefer this route! Get a good agent to help you, they can find these deals for you. There is one here, that is very good! ;-)
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Old 11-11-2012, 11:50 AM
 
Location: San Diego
774 posts, read 1,262,118 times
Reputation: 455
Quote:
Originally Posted by Big House View Post
Buying these houses is a huge risk, and unless you really know what your doing - you could pay a huge price. People have bid on houses - thinking they got a great deal - only to find their money only paid off the HOA dues, and they own nothing! Many have bought houses with Chinese / defective drywall, other have bought houses that have huge HOA dues, CCD fees, liens (from unpaid contractors), clouds on the title from a slue of sources, have mold, roof damage, and have been totally stripped out of all valuable, and various sorts of vandalism. Others have paid off only the 2nd mortgage or a line of credit, and not the first mortgage. Some have bought the mortgage, and found out the 2nd mortgage or line of credit has not been paid, and the foreclosure did not put the plaintiff in a position with superior rights over the other lien holders.
If you buy a house this way, you pay 100% cash the day you buy - and you have seconds to decide to spend tens of thousands if not hundreds of thousands of dollars - HUGE risk!! If you do decide to do this, it is important to know that you are bidding against investors that are sharks. They do a tremendous amount of research on each house they persue, know what they are doing, are will financed, and if you beat them. . . . you're gonna worry "what did I do to myself!"

If you buy a foreclosure or a bank owned property, you won't incur these risks, and you will get a clean insurable title. Even wise investors prefer this route! Get a good agent to help you, they can find these deals for you. There is one here, that is very good! ;-)
Don't you take exactly the same type of risks with foreclosures and bank-owned property?

How do you know what kind of drywall is behind the paint?

Can mold, if present, always be found?

If a house sustained structural damage, will the inspector always be able to find it?

Part of me thinks that assuming that a house will need $30k of work and paying $20k for it is less risky than paying $60k for a house that looks OK. Correct me if I'm wrong. I'm new at this.
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Old 11-11-2012, 04:47 PM
 
Location: Lemon Bay, Englewood, FL
3,113 posts, read 4,535,240 times
Reputation: 1083
One certainly wouldn't think being educated in RE on a public internet forum would be the most resourceful choice, especially with such high stakes.
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Old 11-11-2012, 10:40 PM
 
Location: Florida
1,639 posts, read 2,187,222 times
Reputation: 1099
Quote:
Originally Posted by Harbor Hopper View Post
One certainly wouldn't think being educated in RE on a public internet forum would be the most resourceful choice, especially with such high stakes.

Agreed. Everyone here that has knowledge said DON'T DO IT! But some still will, without the proper research.

Maxb, ALL RE purchases have risks. Some of those risks are eliminated by going through the "normal" channels. If you decide to bid on an auction home don't say we didn't warn you. They have many more risks, some have been pointed out here, others will be waiting for you. A foreclosure or bank sale will allow you to inspect...If you or your inspector can't determine if there are major problems such as mold or CDW that is your fault. An auction home you can't usually inspect at all. I'm not sure what is unclear about this. You want to hear the answer you want to hear...we can't give it to you. Ask in as many ways as you want and you will get the same answer.

BTW, my drunken post last night about going into a house without permission was in no way a recommendation. It was my friends house, who still receives tax, water and other bills for it. Legally he is still the owner of record so I had a legal leg to stand on (barely). My point was just because YOU can't see the inside of the house doesn't mean the people you are bidding against didn't. They have the upper hand, and if you outbid them you will probably find out why you did....

Although you didn't ask for this advice i will give it to you: Auction house 20k plus 30k in repairs = 50k. Add in the liens, possible cement in the drains from the previous disgruntled tenant, possible mold remediation, almost guaranteed full remodel, missing copper, probable code/permit violations etc... and you are WAY above what that house in a better neighborhood would cost through a safe bank owned sale. The same 20k (50k+) house you gambled on can probably be bought for 40-50k without much work needed, after SEEING and INSPECTING it, with an opportunity to back out.

I hope you get the steal you are looking for, I really do, but please update this thread when you find something.
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Old 11-12-2012, 12:24 AM
 
Location: San Diego
774 posts, read 1,262,118 times
Reputation: 455
Quote:
Originally Posted by HarborRat View Post
They have the upper hand, and if you outbid them you will probably find out why you did....
I hate to nitpick, but the link that was posted above described a Vickrey auction: if you win, you pay the next highest bid amount. The real danger is not the sharks you are bidding against, but other amateurs.

By the way, I appreciate all of the advice given, whether I directly asked for it or not.
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Old 11-12-2012, 08:38 AM
 
Location: Punta Gorda and Maryland
6,102 posts, read 13,060,618 times
Reputation: 1220
Quote:
Originally Posted by max.b View Post
Don't you take exactly the same type of risks with foreclosures and bank-owned property?
No, when you buy a foreclosure or short sale - the bank is obligated to give you clear title. when you buy it at an auction you dO NOT get that. Often there are HOA liens, CCD liens, code violation fines, 2nd Mortgages, Lines of Credits, and other things that remain - and you are at risk of just buying a lien to pay, and not getting clear title - it is VERY RISKY. I am experienced at this, and can tell you I have paid all of the above at one time or another. And when you pay 100% in cash, and find out you have a problem - IT AIN"T FUN!

How do you know what kind of drywall is behind the paint?
You usually can tell, if the house has been sitting for months or years that it has a smell like someone just set off firecrackers in the house, and you can look at the plumbing fixtures, doors and hinges, copper wiring, hvac coils, metal fasteners (of all sorts) and see if there is signs of rust or blackening - if your looking at copper. It gets far more complicated than that - if you want 100% assurance you need to do expensive and time consuming tests which you don't have time for if your bidding.

Can mold, if present, always be found?
No. Mold is not always found, but it is sometimes. The other thing is sometimes you have termite damage, and that can be left unchecked for years while the house sits and is vacant.

If a house sustained structural damage, will the inspector always be able to find it?
No, they have disclaimers, but they generally will find all the obvious signs. Most of the newer houses of course were inspected when they were built, and were generally built in accordance with approved engineered drawings. Houses that have been repaired and altered - may not have been, but the inspectors will look for signs of that, and pay more attention. I've recommended Eagle Eye inspectors and they have always done a good job for me.

Part of me thinks that assuming that a house will need $30k of work and paying $20k for it is less risky than paying $60k for a house that looks OK. Correct me if I'm wrong. I'm new at this.

Im not sure how to evaluate that, or the context of it. Are you talking about buying a $20K house? That probably isn't happening unless you are one of the best real estate pros in the area - like Willow's (the 14 year old that bought two houses) mom - you won't find those deals. ***AND!!!*** if you bought a $20K house and put $30K into it, it probably wouldn't appraise out at $50K, so it would take a long time to realize a good position on it. (t
Based on the strength of your questions, I strongly recommend you do not try go this route - I've only touched on the things to be concerned about. But, if you do decide to go that way, at least I've given you some of the major things to know going in. My recommendation would be to find a good agent (like one that posts here all the time - she knows a lot), and she has very good access to information to help you range in on what you want, and save you a lot of time doing it on your own.
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Old 11-12-2012, 08:47 AM
 
Location: Punta Gorda and Maryland
6,102 posts, read 13,060,618 times
Reputation: 1220
Quote:
Originally Posted by max.b View Post
I hate to nitpick, but the link that was posted above described a Vickrey auction: if you win, you pay the next highest bid amount. The real danger is not the sharks you are bidding against, but other amateurs.

By the way, I appreciate all of the advice given, whether I directly asked for it or not.
We are here to help.
If nothing else we provided some things to consider.
You WILL be bidding against pros.
You may read about boxing, but would you seriously step in the ring with a cage fighter, and put all your hard earned cash up front betting you'd win?

I've posted here for years, trying to stimulate conversation, and offer useful information to all - there are lots of people that want to get a great deal - and I hope everyone gets one!
I would hate to see someone get hurt, and not get good advice, or at least the proper things to consider.
HR is right, every house is different, and you are often buying a hornets nest from people who are bitter about their loss, and will suffer no recourse for their mischief.

What ever you do, please come back and let us know how you make out. You'll decide your own actions, I hope you succeed.
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Old 11-12-2012, 11:20 AM
 
Location: San Diego
774 posts, read 1,262,118 times
Reputation: 455
Quote:
Originally Posted by Big House View Post
We are here to help.
If nothing else we provided some things to consider.
You WILL be bidding against pros.
You are missing the point that you do not pay the amount of YOUR bid in a Vickrey auction.
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Old 11-12-2012, 11:44 AM
 
Location: Lemon Bay, Englewood, FL
3,113 posts, read 4,535,240 times
Reputation: 1083
This guy is obviously not getting the answers he wants, so why even bother replying any more. Let him live & learn.
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Old 11-12-2012, 12:31 PM
 
Location: San Diego
774 posts, read 1,262,118 times
Reputation: 455
Quote:
Originally Posted by Big House View Post
My recommendation would be to find a good agent (like one that posts here all the time - she knows a lot)
Are you talking about Willow's mother? I know that she's on CD.

In general, I have to say I'm a bit suspicious of RE agents. They earn commission, so they want you to pay as much as possible, whether it's a good deal for you or not. Am I wrong?
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