[lambtron]

So, I'm looking to get into a house. Anyways, I've been looking at pre-foreclosures/foreclosures, and I honestly have no effing clue how it works. I've found several houses that are exceptionally nice, and listed way below what their actual value likely is. For example, I found this 3k sq/ft house, 4bd, 3 bath, over in the bay area here for $10,500.

Is this the price the bank is looking to get, is it what the previous owner owed, or is it just listed so low to get potential buyers like me started in a bidding war? And, this would be a short-sale, no? I am aware that those can take quite some time to close a deal, but that's as far as my home-buying knowledge extends. I would appreciate anyone who could give me a rundown of how pre-foreclosures and foreclosures work, and maybe some tips on getting into one for a low price!

[JB135i]

Best advice I have (11 homes/rehabs) is everything will cost twice as much and take twice as long to do as you think it will for repairs and upgrades. After that, it's all gravy.

And that really isn't exaggerating much...

If it comes in under, then you are a happy camper.

[Peanuto]

Originally Posted by JB135i

Best advice I have (11 homes/rehabs) is everything will cost twice as much and take twice as long to do as you think it will for repairs and upgrades. After that, it's all gravy.

And that really isn't exaggerating much...

If it comes in under, then you are a happy camper.

Agreed. I am a real estate agent in MD. Foreclosures are a colossal pain in the ass. That $10,500 is most likely an opening bid for auction. If that is a sales price there is a MAJOR issue with the house. Banks, while caring about getting their money back, do, if the opportunity permits, like to make some cash too. My advice is get a real estate agent. Especially if you are buying a foreclosure. You will only have to pay an admin. fee, assuming the bank honors agents (most all do. Admin fee usually 200-300). Also, they can find out the strange details of a deal or property, and best of all, if something gets f'd up in the transaction, the agent would be to blame legally, not you.

[JeF4y]

I just spent the last 4 months trying to buy a couple of foreclosures. Long story short, it's an exercise in frustration and patience. And I was buying with CASH. Major pain in the ass. Sure, I ended up with a place that is worth 2.5x what I paid for it, but it was a freaking nightmare.

The banks are very lazy about dealing with foreclosures. There's another unit in the bldg where I just bought that I'd LOVE to buy. I have cash, waiting to write the check and the bank just won't deal with it. It's been sitting for +4 months now. Bank said sometimes it can take up to a year to come to market and they won't sell outright.

Again, you can get a decent deal, just come to the table with very low expectations and a shit ton of patience.

[MontegoGoGoGo]

We just bought a "short sale" home and it took over 5 months; we paid cash also.

Sheesh what a headache. But we saved about $ 100,000.

Get an agent. Our agent told me that the more foreclosures there are, the less agents want to deal with them though. Just so much work. Ours said she would never act as the seller's agent on a foreclosure. Make sure to get an agent who is big in that specific area of the city. They will likely know the house and its history. The house we just bought, our agent sold to the people (....er, bank) we bought it from.

P.S. - It was a NIGHTMARE getting anyone at the bank to acknowledge us.

[chungdae]

I'm also in the market into purchasing a foreclosure. Thanks for the tips.

[lambtron]

So considering that I want to move into a house upon graduation, would it be wise to start the process with an agent several months in advance? Also, does using a co-signer for a home loan work the same way as for a vehicle?

[JB135i]

Originally Posted by lambtron

Also, does using a co-signer for a home loan work the same way as for a vehicle?

In Illinois it doesn't, not sure about there. Here, the owners (grantee's on the deed) should be the same as the borrowers named on the mortgage (the mortgagors). If you have(need) additional borrowers they can sign the note and then sign the mortgage to waive their homestead rights so the bank can take the property back, if it needs to, easier than they could otherwise.

Credit wise it's similar, they will look at the debt to income ratios, appraisals and of course the credit reports and make the decision from all of that information.

That's an extreme simplification, but I am not a lawyer, so I am not able to go further and it's very likely the laws work differently in Cali too. Because you guys are even more screwed up than Illinois.

[Peanuto]

Interesting Montego... Agents are not allowed legally to descriminate on dealing with a property due to its status (saying she wouldn't deal with foreclosures). Violates sooooo many regs. I bought a short sale, closed in two weeks, but mine was pre-approved. I have clients now who have been under contract for 6 months. We will be closing at $463k on a property that sold in 2007 for $1.1 mil. A lot of the speed for a short sale depends on the number of liens and how bad the sellers financial status is.

[jaiman]

Originally Posted by Peanuto

Interesting Montego... Agents are not allowed legally to descriminate on dealing with a property due to its status (saying she wouldn't deal with foreclosures). Violates sooooo many regs.

I think that would apply to an agent who was representing a buyer. I can't believe there is a regulations that would force an agent to list any property.

[Peanuto]

Originally Posted by jaiman

I think that would apply to an agent who was representing a buyer. I can't believe there is a regulations that would force an agent to list any property.

sorry, you're right, misread it