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is there a nation wide search engine, or a local real estate website, that gives the option of searching for foreclosures in the area?? i have found a lot of great local realtor pages, but none that allow me to search for foreclosures. thanks!
I have found in the last several that there aren't that many deals out there on foreclosures. I have only seen a few. They are priced at market value right along with the other listings.
stay far away from foreclosures, most are money pits
We have been told by realtors over the years that the banks have personnel that damage the homes even more than the former residents. So they can collect additional monies from insurance policy.
We looked at several foreclosed homes and found everything missing. Wall outlet covers, screens, rugs, chandeliers, door knobs, everything under the sun.
Most homes that have been foreclosed on get stampeded by others.
We even found a car driven through the garage door where the former owner was so ticked off by the mortgage company for foreclosing after she was delinquent for eight consecutive months. I commend that mortgage company for trying to help her!
Most foreclosures are indeed money pits. One point of clarification: the foreclosures we are talking about are REOs (Real Estate Owned). REOs are what banks call properties that they were unsuccessful in selling at foreclosure auction. At foreclosure auction, the property is sold to the highest bidder at the courthouse steps. The opening bid starts at the price of the first mortgage (second trusts are extinguished and the lender has no recourse). Usually foreclosed properties will have high loan to value (LTV) ratios because if the seller could have simply sold the property and paid off the mortgage, he would not have let it go to foreclosure. So if a $150,000 house has $145,000 in a mortgage lien, no one is going to bid for it at auction. At a foreclosure auction you have to pay cash immediately for the property. No one with $145,000 in liquid assets is stupid enough to pay cash for a property that is sold as-is and could require extensive repairs, an eviction process, etc..
So the bank takes ownership of the property, evicts the previous owner or the tenants, and puts the property up on the market. Banks are usually very greedy. To be fair, they have an interest in getting as much as they can for the property. But you will see properties that are worth $150,000 when in good condition, and obviously requiring $20,000.00 worth of work, being listed for something like $140,000. Then the banks will reduce their asking price by little increments if the house doesn't sell. They then require the buyer to purchase the house as-is, make no repairs whatsoever. Some of the properties cannot be financed conventionally because they are in such bad shape. It really depends.
If you bought that $150,000.00 repaired value house that needs $20,000 in repairs and paid only $120,000 for it, you could put in the $20k of repairs and have $10,000 in profit right? Well, that is true unless you are a flipper because if you sell the property you will probably end up paying real estate commissions. But even if you intend to keep the property, there are many surprises that could come up. That $20k repair project could turn out to be $40k because of unforeseen circumstances.
If you have deep pockets and a lot of patience, check out foreclosures. You need to be very careful. Try ReoTrans.com for some listings.
Another thing to keep in mind. In NC, many foreclosures have foundation cracks and other structural issues, often because of unstable clay. I have seen several foreclosures recently that required a minimum of $40k to $60k in foundation repair. They were probably foreclosed on because the owners did not have the money to fix them and put them on the market, and didn't have enough equity in the properties either.
I have seen some foreclosures that are amazing deals. I saw a house in Fuquay-Varina that was worth $150k, sold for $110k to a cash buyer within 2 or 3 days of being listed. The house needed new carpet, but that's about it. Everything else was in good shape. If a foreclosure shows up in a nice area with only cosmetic issues at a good price, it will sell extremely quickly. This is the exception, usually banks will price at market value. With the nationwide increase in foreclosures, we may start to see more bargains in NC because national lenders are feeling pressure from a rise in REOs in other states.
Even homes requiring 20k to 50k in repairs go quickly if priced right, as long as they are located in desirable neighborhoods. Desirable, bargain foreclosures will show up on the MLS and will sell within 48 hours usually. You need to keep constantly searching and be ready to pounce on a good deal. You also need to be able to see and inspect the properties because usually they will choose a buyer with no inspection contingencies. Cash buyers usually get precedence as well, leaving the best bargain deals inaccessible to the average buyer.
Another thing to keep in mind. In NC, many foreclosures have foundation cracks and other structural issues, often because of unstable clay. I have seen several foreclosures recently that required a minimum of $40k to $60k in foundation repair. They were probably foreclosed on because the owners did not have the money to fix them and put them on the market, and didn't have enough equity in the properties either.
I have seen some foreclosures that are amazing deals. I saw a house in Fuquay-Varina that was worth $150k, sold for $110k to a cash buyer within 2 or 3 days of being listed. The house needed new carpet, but that's about it. Everything else was in good shape. If a foreclosure shows up in a nice area with only cosmetic issues at a good price, it will sell extremely quickly. This is the exception, usually banks will price at market value. With the nationwide increase in foreclosures, we may start to see more bargains in NC because national lenders are feeling pressure from a rise in REOs in other states.
Even homes requiring 20k to 50k in repairs go quickly if priced right, as long as they are located in desirable neighborhoods. Desirable, bargain foreclosures will show up on the MLS and will sell within 48 hours usually. You need to keep constantly searching and be ready to pounce on a good deal. You also need to be able to see and inspect the properties because usually they will choose a buyer with no inspection contingencies. Cash buyers usually get precedence as well, leaving the best bargain deals inaccessible to the average buyer.
fINALLY SOMEONE WHO KNOWS WHAT THERE TALKING ABOUT. i ALSO AM AN INVESTOR OR i WAS IN THE LATE 90'S IN jERSEY WHERE I STILL OWN SEVERAL HOMES AS RENTALS. I CAN NOT FIND ANY HOMES THERE TO RENT OUT FOR EVEN A $100 A MONTH PROFIT. wHEN I STARTED 300 TO 400 WAS EASY TO MAKE ON PROPERTIES. AND I HAVE DEALT WITH A FEW BANKS ON FORCLOSURES AND YOU ARE CORRECT THEY WANT EVERY DOLLAR. I HATE SEEING THESE FOOLS ON TV LIKE JOHN BECK AND THAT OTHER KID WITH NO CREDIT NO MONEY AND YOU CAN BUY A HOUSE . TELL US WHERE THESE FANTASY BANKS ARE AT I ALSO HAVE DONE MORTGAGES FOR YEARS THOSE BANKS DO EXIST. THERE IN FANTASY LAND. I AM SORRY FOR ALL THE FOOLS WHO WASTE THERE MONEY ON THOSE FAKE COURSES THAT TEACH YOU NOTHING............
As one that has sold and lists foreclosures...the comments so far are correct for the most part. The TV shows really throw people off expecting to find a home dirt cheap and flip it like Richard Davis. Most homes around here are listed close to market value unless it's a pit. Usually the banks will list at market value minus major repairs/trash outs documented in the BPO by the Realtor. BUT look at days on the market, because the banks are losing money as they sit and just because it's listed at a certain price doesn't mean the bank isn't considering just cutting their losses.
As one that has sold and lists foreclosures...the comments so far are correct for the most part. The TV shows really throw people off expecting to find a home dirt cheap and flip it like Richard Davis. Most homes around here are listed close to market value unless it's a pit. Usually the banks will list at market value minus major repairs/trash outs documented in the BPO by the Realtor. BUT look at days on the market, because the banks are losing money as they sit and just because it's listed at a certain price doesn't mean the bank isn't considering just cutting their losses.
Based on your experience in this area what is a good percentage below list to start with? Is it a good assumption that the longer on the market the lower to make the initial offer? Also, looking at some of these foreclosure list it appears their are home in foreclosure in about every price range. Is there a market price that has more foreclosures then any other? Thanks for the information.
Most foreclosures in NC are on properties worth below $100,000. Since NC never had a huge real estate bubble, you didn't have investors buying $500,000 homes hoping to make money off the appreciation, then ending up with foreclosure. Most of the foreclosures in NC are probably the "traditional" type.... These are usually people who had cheaper houses to begin with. If you look at foreclosures you will find that the bulk of NC foreclosures are in Charlotte and the Triad. The Triangle area does not have that many.
As for how much to offer, there is no general rule. You have to evaluate each property. Check county records online, look at the Notice of Foreclosure Sale to find out what the first trust (starting bid) was - this is how much the bank was owed on the mortgage, anything sold below this will be written off as a loss, also check how much there is in back taxes. Walk through the property and make an estimate of how much repairs will cost, then double that estimate. Usually the bank wants to sell for top dollar, even if the home requires huge amounts of work. Lower offers will sit for 3 or 4 days on somebody's desk and then will be rejected. Then, with no offers in sight, the bank will usually lower the price. One other thing in my experience... banks generally are quicker to provide closing cost assistance than reducing the asking price.
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stay far away from foreclosures, most are money pits
