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When it comes to buying a foreclosure, what types of things should I know? Is it possible to buy a foreclosure, in good shape, really cheap? I want to move to Nashville, Tennessee area and I only have a budget of 100,000 or less, preferably way less than 100 grand. I want to get a foreclosure so I can pay it off fast and get rid of a mortgage payment so I can start saving my money instead of spending it all on the mortgage. I know I'll still have bills, but at least the house payment would be out of the way. If you have any good tips or advice regarding purchasing foreclosed homes please feel free to share.
Advice - find a good agent in Nashville that knows that market and what you can expect to get with your budget. You might want to post your question in the Nashville forum:
Check out Foreclosure.com | Foreclosures | Foreclosure Listings, you can find all the Fannie Mae foreclosures listed there. We're under contract on a Homepath property right now that is in great shape, and we're paying about 40% of what all the other unit owners paid when they bought them new in 2006.
Don't limit yourself to foreclosures in an attempt to get a cheap property. Another unit in our development is listed as a regular sale and they've been dropping their price in line with the foreclosed unit. There are non-distressed properties that are pricing themselves in competition with the distressed properties when they want to sell badly enough.
If you buy a foreclosure, be sure to get a good property inspection. You don't know what might be wrong with the property, and the bank isn't going to tell you.
Look at everything in your budget. Sometimes there are houses that aren't foreclosures that are just as good of a deal. Even better b/c the homeowner is keeping up with maintenance, etc.
If you're not on a time limit, short sales can be an avenue as well. It's in the best interest of the homeowner that the home meet any qualifications (such as FHA) so they're apt to keep the house in better shape than some foreclosures.
I'll agree with getting the good inspections done - a lot of times, when people know they're headed for foreclosure, any and all maintenance, etc. goes out the windows. Sometimes even the windows go out!
Just take your time and make sure you're getting the best deal you can out there - there's TONS to pick from down here!
When it comes to buying a foreclosure, what types of things should I know? Is it possible to buy a foreclosure, in good shape, really cheap? .
I'll sum up my experience when I was looking for a foreclosure.
Most were in a state of disrepair. And while there is disrepair... there is also "wrecked." One key thing you are looking for is a home where the foreclosed homeowners didn't wreck the place before they left. Its pretty sad when that happens, but it seemed common in my experience. I saw about 20 foreclosed homes and 75% of them were "wrecked."
Wrecked to me means... broken windows, seemingly purposefully damaged floors, dog/cat urine on the inside of the house, holes in the drywall.
After months of searching I found a real gem (it didn't look like much), but it turned out to be a house where the previous owner sold the house to someone that never even moved in and never paid a single mortgage payment. The house was vacant.
It was a steal. (Mind you, it needed new water heater, AC, I renovated kitchen, flooring, replaced the roof - but I got the house for the right price that factored in its needs). If you look long enough, you can find something like that.
And from my limited experience, the bank didn't want to budge too much on their initial asking price. They did, but I had to come up a lot more than they came down.
A lot of properties which are foreclosed usually require renovation or repairs. Important is you learn more about the properties that you are interested in then inspect and assess the renovations and repairs you may have to make.
The good news is homes here are still fairly cheap. I'm a couple hours southeast of Nashville but got a huge brick house on nearly 10 acres for a good bit under 100k. It was about five years ago, but there are still homes out there in that price range. The further you go from Nashville the less you'll pay. Smyrna and LaVergne are still pretty reasonable and Murfreesboro is really a good bit less. I've got friends / former co-workers in all three towns. I just prefer rural areas, so I wound up buying way out in the boonies. Was a blessing until gas got to nearly $5 / gallon a while back. LOL. The trip 5 days a week to and from Nashville was costing me more in fuel each month than our mortgage. That hurt.
Oh, try Cookeville / Crossville areas too. Not *too* far from Nashville, right on I40 so it's an easy drive, though traffic on 40 can get bogged down more than 24 usually does.
ETA: Just checked RDC for 3 or more bedrooms, 2 or more bathrooms within 20 miles of and including Nashville under 100k and there are 713 listings. Shouldn't be a problem at all finding what you're looking for!
ETA2: This of course goes without saying, but make sure you get a good appraisal. After the flood we had you want to make sure there is no damage the home owner may be trying to hide.
You will find out quickly that many REO's are not fha approved and you may need to put 10-20% down. Your best value is usually a home that needs a little work that may scare away FHA buyers. Then again the downpayment may make you stick to certain home that are more complete, and move in ready.
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