buying a foreclosure? (Denver, Thornton: bank owned, for sale, foreclosures)

[sportsfangal]

hey! had anyone ever bought a foreclosure home? I am beginning to search for a 1st time home in Denver and hadn't given much thought to foreclosures until now.
Do VA loans accept them?, are they always in awful condition and need lots of work? can you get inspections on them? was it a long, terrible, process?
any insight would be great.
also, if anyone knows anything about the healthcare jobmarket in Denver (non-nurse) I'd love to hear insight on that as well!
thanks!
9-17-08

[2bindenver]

Each property is unique in it's condition. Yes, most of them are messed up. A good Realtor would be happy to help you evaluate lender owned properties. There are good buys to be found everywhere.

We, Realtors, can search for properties that accept VA terms. Yes they will allow inspections, some will fix health & safety issues, some won't. VA loans are usually 0% down, and some of your closing costs are paid by the seller.

[excid182]

we just recently moved to denver and puchased a foreclosure. we used my wife's VA loan to buy the house with 0% down. the VA has pretty strict guidelines as far as the house is concerned. we were told that the house had to be in livable condition and not all torn apart and stuff. i think that if you find a house that really needs a lot of work then the VA loan will not accept it. we had to have an inspection done by someone approved by the VA. i can't really think of anything else right now but if you have any questions, let me know.

[sportsfangal]

thanks excid182! appreciate the info. I do remember now that VA loans have strict guidelines as far liveability.guess that's a good thing, I don't want a fixer-upper anyway!

[steveindenver]

Not wanting a fix-up and buying a bank owned are almost mutually exclusive terms. I'm not saying they don't exist, but I have never seen one.

A couple of other caveats about bank owned properties. Depending on the bank the process is going to be slow or extremely slow. In general the listing agent for these properties is very junior as such you will need to be patient and do some hand holding.

There is some collusion in the market in terms of asking prices by the banks, and as of late they are not moving on prices, even after inspection.

As mentioned above, VA and even FHA loans have some strange stipulations, make sure you get a full list before you start your hunt -- and good luck.

[Mike78613]

Originally Posted by sportsfangal

hey! had anyone ever bought a foreclosure home? I am beginning to search for a 1st time home in Denver and hadn't given much thought to foreclosures until now.
Do VA loans accept them?, are they always in awful condition and need lots of work? can you get inspections on them? was it a long, terrible, process?
any insight would be great.
also, if anyone knows anything about the healthcare jobmarket in Denver (non-nurse) I'd love to hear insight on that as well!
thanks!
9-17-08

check this out

Finance - Home Buying

[zionvier]

I bought my first home back in January. I was looking at foreclosures almost exclusively because of my price range. I searched for a couple months, checking out about 10 homes each week. Most of the time I'd simply do a drive by on the home, maybe walk the premises. Then I'd contact my Realtor again to schedule an inside tour of the place, since you can typically tell by the neighborhood and exterior of a home if you're not interested at all. The majority of homes I was able to cross off my list without making my Realtor make a trip out there.

In the end I was able to find a foreclosure that was in great shape, with the exception of a lawn that had been neglected for almost a year. I honestly don't know how many places I drove past or scouted, but I'd guess it was somewhere near 100. I heard others say how great it is looking for a home, but because of my price range I didn't think it was very fun. Perhaps it's different when you're able to look at nicer places.

In the end, great neighborhood, house is only 10 years old, all appliances (frig, stove, dishwasher, washer/dryer, furnace, water heater, etc) were there and in good shape. It was move in ready, just had to do some basic cleaning before hand. Carpet cleaner, clean the appliances, etc. So it's possible to find them, but be prepared to look at a lot of crap before hand. Which isn't always a bad thing, you'll get to know the areas pretty well.

Good luck on your search. There's actually a number of houses in my community that have been for sale for quite some time that look like they are in good shape. But most people hear "Thornton" as the address and immediately say no without seeing it, but the entire subdivision is only 10 years old.

Another thing you might want to check out are HUD homes. My experience is that they were often some of the worst maintained, but like everything there's always exceptions. The positive thing with them is that the Feds have done an inspection on it and basically have an 80 page document your realtor can get for you that outlines EVERYTHING that's wrong with the house. When I say everything, I mean even a quarter sized chip in the paint on the siding will be listed. There's definitely no surprise with what's wrong with a house at that point.

Good luck on your search, you'll find one. They do exist.

Oh, and check out www.zillow.com if you haven't already. That site was a real asset while I was looking.

[sportsfangal]

hi zionvier-
thank you for your input, this 80-page document, was the bank willing to fix any of it? did it replace the inspecton?
I'm almost not looking forward to looking for a home because of my price range-other posters have written that I will find only something in the "ghetto", or in bad shape, or doesn't even exsist!
But, I'll hope for the best.

[zionvier]

With HUD homes, they've done an inspection, but personally I would suggest getting an inspection done on your own as well since somethings may have changed. Some houses have been on the market for almost a year now which means they probably haven't been tended to much. Every HUD home is different, some do have $xxx set aside and stuff, honestly you're realtor can tell you about each place.

Personally I didn't go with a HUD home. I found one that was bank owned that had been sitting empty for 10 months. I was looking at houses listed at $125k and less. So everyone is kind of right about most places being in the "ghetto" (ghetto is relative since it's not like we're in Compton or something). Like I mentioned, most places I knew I didn't want just by driving to it. Once I saw the street it was on I often knew I didn't want to live there. But, in the end, because of the market right now there's a lot of deals to be found. I also wasn't affraid to low-ball the banks on the houses when I did make an offer. Low-balling a privately owned house can some times insult the seller and they might just not want to deal with you or your realtor, but I figured with a bank it's looked at just as business and no emotion. So I found a house that was listed at $118k, offered them $88k. We ended up settling on $93k, add closing costs and stuff to that and I ended up spending $98k.

Is my place huge? no. Is it beat up? no. It's just a good starter home to get my foot into the financial home ownership door. I actually bought the smallest home in the neighborhood of about 300 houses. Just a simple 10 year old 2 bedroom, 1 bath, 950sqft house with a 1 1/2 car garage.

For the longest time I thought I was going to be stuck buying a house built in the 60s that had an outdated kitchen, cracks above the doorways and in the walls, bad carpet, tiny little bedrooms, and basically an energy nightmare when it came to insulation and windows. But, I just kept looking because of this market and figured sooner or later I'd find what I knew was out there somewhere. Take your time, jump on the MLS web sites and look up some houses and start driving around to different areas and sooner or later you'll find the one people don't think exists. Like I said, I took a couple months. I'd go do a drive by on a house or two each night after work and schedule to see the houses I liked with my realtor on the weekend if I happened to see one I might like. So my social life took a nose dive for a little while there

[steveindenver]

It is also worth considering that once you do the math owning a home is often not something that makes sense. 15+ years just to break even versus renting and that is with the expectation, unrealistic as it is that prices will increase and beat inflation during that period.

The concept that owning a home is the American dream and an American right is what got us into this current mess.