What is the best process for buying a foreclosure? (tax lien, bank owned) - Fort Myers - Cape Coral area - Florida (FL) -Lee County - City-Data Forum

tankhead · 10-21-2012, 07:49 AM

Would I have to go to the courthouse and buy it there? Do I have to pay cash? What about if I have a pre-approved loan? Any details would be helpful.

nhkev · 10-21-2012, 10:28 AM

Quote:

Originally Posted by tankhead

Would I have to go to the courthouse and buy it there? Do I have to pay cash? What about if I have a pre-approved loan? Any details would be helpful.

stay away from buying a foreclosure. from an auction it is not meant for a beginner or novice you have much more chance of making a drastic mistake as opposed to getting a great deal. The pros are out there watching the good properties and have deep pockets and will always outbid you, the ones that aren't being bid up there is a reason for it. 3 yrs ago this would have been a good way to get a great deal but those days are long gone.

I'm going to give you an example to hopefully scare you away. A couple had it in their mind they would be able to pick up a steal at a foreclosure auction. They found an upcoming auction that a lender was foreclosing on a house that would normally sell for $200k. They went and bid $65k and were the winning bidder they were hopping up and down celebrating their great deal. Luckily for them an investor tapped them on the shoulder and said "you realize you just bid on a property where the 2nd mortgage was what was being foreclosed and the house you just bid on has a 1st mortgage for $250k that will still be a lien on the property. The couple was shocked and asked what they could do? the investor said "lose your deposit".

there was another person who came on this forum because they had bid on a property to find there was a IRS tax lien again in the multi hundred thousand range but she didn't realize it untill after she paid for the whole property.

there could be chinese drywall issues or severe mold problems.

I monitor foreclosure auctions and 95% of the time the properties are being auctioned off "OVER" their assessed price. Just stay away.

you can however buy a REO property which means the bank foreclosed and when it went to auction they were the highest bidder. you can use a loan to buy these, you can do inspections, your lender will do a title search to ensure it will be an insurable title. just use the MLS and you should see it say "lender owned"

tankhead · 10-21-2012, 03:23 PM

What about buying a preforeclosure? What is the process for that? I was thinking of maybe also looking into preforeclosures as another option.

nhkev · 10-21-2012, 03:49 PM

Most preforeclosures are on the mls listed as short sales. Concentrate on the ones that say lender approved price and plan to have it take a long time to get answers and be let down often. But there is the potential for a good deal here as a lot of people avoid these

Florida Paradise · 10-22-2012, 12:05 PM

Quote:

Originally Posted by nhkev

Most preforeclosures are on the mls listed as short sales. Concentrate on the ones that say lender approved price and plan to have it take a long time to get answers and be let down often. But there is the potential for a good deal here as a lot of people avoid these

Good luck with the short sales... I put 3 offers in on 3 different places down there and never even heard back from 1 of them. I finally bought from a bank and the process was seemless. As posted earlier, I would NEVER buy from the court house steps as you never know what liens are against it. AND you better know exactly what neighborhoods are decent enough to buy in.

brianjb · 10-22-2012, 02:16 PM

Quote:

Originally Posted by Florida Paradise

Good luck with the short sales... I put 3 offers in on 3 different places down there and never even heard back from 1 of them. I finally bought from a bank and the process was seemless. As posted earlier, I would NEVER buy from the court house steps as you never know what liens are against it. AND you better know exactly what neighborhoods are decent enough to buy in.

What do you mean you bought straight from a bank? Do they list properties that they own and you look at those and buy straight from them?

This sounds interesting

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THasson · 10-22-2012, 05:15 PM

I'll echo what others have said about buying from the Courthouse steps. Unless you're an experienced, savvy buyer the system is rigged against you.

Wait/look for properties that have been through the process and are being offered as bank-held (you'll often see the term REO).

We bought ours as such in '08, no regrets.

-Tim

xoomer · 10-27-2012, 07:40 PM

Quote:

Originally Posted by tankhead

Would I have to go to the courthouse and buy it there? Do I have to pay cash? What about if I have a pre-approved loan? Any details would be helpful.

When I worked for a financial institution we held foreclosure auctions on the courthouse steps but it would have been almost impossible to buy any property from us. First of all, there would be 50 or 100 other foreclosures going on at the same time and there was no way to tell who was selling a particular property. Even if you did happen to find us you would not have had a chance to inspect the property and you would have needed cash or a cashier's check to buy the property from us on the spot. Things may have changed since I was involved in this years ago, and in another state, but I imagine it is still basically the same.

On the other hand, once we had foreclosed on the property we were usually anxious to get it off the books and would consider any serious offers and would often finance the property. As previously mentioned, that isn't a bad way to go.

We never auctioned off property but I did go to a couple of auctions and saw that it wasn't for me. It seemed that the people got in a bidding frenzy thinking they were going to get a "deal" and bid the properties too high. Also, there were some other considerations about getting a clear title that scared me off.

Straegen · 10-30-2012, 05:23 PM

If you have a lot of patience and great credit or cash, there are still good deals to be had in the short sale market. Foreclosures like others have mentioned are a complete crap shoot.

scrapbookingmom · 11-14-2012, 03:38 PM

Quote:

Originally Posted by brianjb

What do you mean you bought straight from a bank? Do they list properties that they own and you look at those and buy straight from them?

This sounds interesting

Sent from my iPhone using Tapatalk (please forgive typos)

The bank owned homes are on the MLS just like short sales and standard sales. Have you found a home yet?