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My second house was a foreclosure. I had no problems with it and it was in good shape when I bought it (HUD had come in and repainted and re-carpeted it). It made it possible for us to get into our target neighborhood, where the prices were quickly escalating out of our budget.
Has anyone had any past experiences with forecloses? Would you recommend buying one? I know that you have to make sure that it is clear of liens.
Becky,
Yes, I would buy a foreclosure. The right foreclosure. I have seen a few I regretted not buying. I know why I would have bought them.
Why do you want a foreclosure, per se?
The market offers more compelling values than many foreclosures, and no foreclosure aura.
And liens are only part of the battle.
Too many are in deplorable condition, but priced near retail. That means you are buying a project with little opportunity for a reward.
Work the numbers hard on foreclosures you would consider buying.
All that said, with the rising foreclosure rates, it may be that some of the inventory will come on the market in better condition.
A few years ago, I had a few investors that bought HUD foreclosures. It was relatively easy to do as I did the paperwork online. There were some good deals.
Things have changed. Most of the foreclosures that are on the market now are in terrible shape. HUD has raised their prices and by the time you do the repairs, you would have been better off to pay a bit extra and get a home thats in better shape.
My first (now sold) home was a foreclosure-the bank had rehabbed it-it had been trashed and vandalized. The only trouble we had was at closing, they forgot to pay up the water bill lien! They did that immediatiely though so we could close that day. YOUR realtor and lawyer should make sure all that stuff is taken care of-I didn't deal with any of the bazillion liens on the place.
I spent the first weeks picking up broken glass, nails and razors out of the yard. We fixed up a few things the bank did cheaply (like, fixing holes in the wall with duct tape, then painting it. Come on...).
We didn't buy for a flip, we bought it because we were young and poor, lol. For us, it was home-for a decade. We made out well in the end, too.
I had an interesting experience with a bank owned property a few months ago. I was searching and online foreclosure site when I found a great house in Cary that was owned by a large national bank. It was relatively new, over 3000 sq ft, and on a 1/2 acre wooded lot near High House and Davis. I drove over there and decided to take a look around the yard and peer in the windows. Imagine my surprise when I found the back door unlocked.
I went inside and toured the house. It was TRASHED. There was junk everywhere, like the family had to move out in a day or something and had to leave stuff. They had spray painted stuff on the carpets and walls. There were holes in the walls, etc. All was cosmetic though, and I thought that if I could get the house "as-is" and clean it up, I would have a nice house for my family.
Well, it turns out that the bank was not willing to part with it until they fixed it up. By then, the price was out of our reach and we had to pass. However, even after they fixed it up and put it on the market, it was still priced as a good value compared to the other houses in the neighborhood.
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