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Old 06-26-2020, 08:03 AM
1,514 posts, read 1,092,429 times
Reputation: 2010


I was just graduating college during the housing bubble, I'm curious what foreclosure auctions and sheriff sales were like back then?

Most of the homes I've seen go to sheriff sale the last few years needed a good bit of work and were a real risk. It seems over the past few years the sheriff auction saving is maybe 20% vs buying off MLS but again these places need work and come with the risk of no walk through.

I'm curious during the bubble pop what it was like, were nice houses in nice neighborhoods going up for auction with much less risk? Were prices still like a 20% discount or could you get a $200k house for $100k if you had the cash?
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Old 06-26-2020, 08:19 AM
7,439 posts, read 9,184,750 times
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In my area, most of the foreclosure houses weren't being sold at auction. They had already gone through the foreclosure process and were owned by the banks--so the banks were selling them directly, even financing some. I bought a nice house for about half of its market value. It needed a few fixes, but nothing too major.

In an even earlier timeframe, HUD used to sell a bunch of foreclosed houses. Sometimes you could find one that was nearly move-in ready; other times the house was so trashed that it wasn't worth the time and money that it would take to repair it.
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Old 06-26-2020, 08:43 AM
Status: "No deal is simple or easy" (set 24 days ago)
Location: Just south of Denver since 1989
11,403 posts, read 30,699,169 times
Reputation: 7910
It is a risk to buy at auction, site unseen. You *can* get a property under market value. You can also spend lots of time and money on a property and get very little of it back.

Most of what you could be looking for is already on the market. You need to figure out your adversity to risk, and find a agent who will walk you through the process. If you are buying an owner occupied property, look into FHA 203k loans.
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Old 06-26-2020, 09:20 AM
Location: East of Seattle since 1992, originally from SF Bay Area
33,081 posts, read 60,089,538 times
Reputation: 36547
There were a number of ways that those homes were handled.

There were vulture investors that would offer to pay off your loan and give you a few thousand to help move that some people fell for. Some fell for that, and the guy might end up getting a $400k home for half that.

There was the short sale, where the owner, buyer and bank all agreed to sell it for less than owed on the mortgage.

The house next to us was more typical. The flaky owners moved out at night using pickup trucks, leaving big piles of trash in the garage and in the driveway. After a few weeks the city posted a notice on the door to remove the trash or the City would do it and charge them along with a fine. After several months a "for sale" sign went up and eventually a nice couple bought it for about $100k below market. Then they put at least that much into it with a full remodel/renovation and have been good quiet neighbors ever since.

Currently we have no foreclosures in our area, most people are still working (from home) in the Seattle/Redmond tech industry. Those few homes that become available are typically empty nesters, and they sell very quickly with multiple offers. According to Zillow, our home has gone down .7% in the last 30 days, but is still 13% higher than a year ago. So far no bargains to be found around here. Most of the layoffs/furloughs have been renters.
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Old 06-26-2020, 09:59 AM
Location: Kansas City North
4,819 posts, read 8,230,000 times
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We bought a foreclosure in 2010. It originally went on the market as a short sale, and someone else made an offer which then languished in the bank’s short sale department (we weren’t looking when this happened.). After about 3 months, the house was foreclosed, the short sale contract cancelled and it went back on the market for $20,000 less than the short sale offer. By this time we were looking, and we pounced on it the first day. The house was only 3 years old and was in very good condition. After a brief bidding war (I assume with the short sale buyers) we got the house. It was still $14,000 less than the bank would have gotten had it taken the original short sale offer.

We had looked at other foreclosures (well, technically all of these were REO because they had been through the foreclosure process) and a lot of them were semi-wrecks.
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Old 06-26-2020, 11:31 AM
Location: Salem, OR
14,547 posts, read 34,984,498 times
Reputation: 14062
All of the good homes were taken back by the bank at the trustee sale and then placed up for sale by the bank. They weren't sold at steep discounts, but still at good discounts.
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Old 06-26-2020, 03:55 PM
22,500 posts, read 41,402,031 times
Reputation: 22423
My realtor neighbor said dealing with Wells Fargo was frustrating; she make an offer but the bank would not reply. She felt the bank was waiting for better offers. No matter the outcome, she said it took months to finalize a deal on a foreclosure.
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Old 06-26-2020, 07:55 PM
466 posts, read 293,909 times
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Back during 2011-2015 most of the good ones in my area were REO. We're talking homes like 3/2/2 that would now go for probably $180k back then for $60k. Maybe needing a new roof and flooring, but otherwise a nice, newer home. I remember a completely remodeled REO on a canal selling for $70k in 2014. Some foreclosures even as low as $50k and completely livable and in good neighborhoods.

Just recently a house that is now on the market for $250k, 3/2/2 about 2000 sq ft with office and lanai, really good neighborhood, sold for $100k in 2010, and it was nearly brand new at the time.

It was just unreal. I too was graduating from college at that time and just entering the working world. I didn't have enough savings or credit to buy back then. Now I've saved a lot and have great credit and there's nothing anywhere close to that for sale anymore. The very few foreclosures now on the market are not going much lower than market value. Anything now feels like a rip off compared to what the same money would buy 5+ years ago, and you have to wonder if it will really ever appreciate in value with how high prices are now.

I think after about 2015 the banks slowed down on letting foreclosures go for cheap and just held off as long as possible for the prices to go back up before putting it on the market. Along with not replying to short sales.
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Old 06-26-2020, 07:59 PM
Location: Chicago 'burbs
192 posts, read 94,822 times
Reputation: 276
I heard from friends that was royal PITA. No response from the bank was a common problem. Finally they bought a house, I believe the process took 6+ months.
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Old 06-27-2020, 04:24 AM
6,196 posts, read 2,738,031 times
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Mine did not take that long, but I bought in 2013. My neighbor had bought in 2011 and got his condo for $40k less than me, so that was really a good time to buy. It was still a good deal, but dealing with the banks was a pain. For me, it only took 5-6 weeks between offer and closing. It seemed like all REOs in my area (or maybe state) used the same real estate agency, because I had 2 friends get foreclosures at about the same time and we were all stuck dealing with these same people in Ft. Lauderdale.
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