goldenstate31

Hi guys forgive my ignorance if there has been a previous thread about this subject!
We have just come back from another trip, to California, (southern ca)
and was orignally looking to buy a home, the regular way, by regular I mean from a seller.
But having browsed through some absolute bargains, where homes have been foreclosed on.
Could anybody here give me some advice, ie the do's and dont's or can anybody recommend any kind of realtors that actually specialize in this market! I believe certain foreclosures have liens etc registered on the properties etc? is this correct?
But basically I could do with some very useful basics, before I try and contact a realtor specialist in the particular field

Englishtart

I don't know too much on this subject, mainly from what others have said, you can get a bargain if you are patient/lucky though.

You need to have plenty of time if you go this route, (sometimes) a foreclosure can take months to get to the 'closing' stage, it's the lenders that are actually selling it and sometimes there is more than one, so you have to get a price approval from each one.

I think there is at least one member here that has gone through this, you could try searching the threads and see if you can find anything.

Good luck!

Not sure if there are any realtors that specialise in foreclosures, I think that most companies will have experience with selling them, unfortunately because of the economy, there are plenty that have had too

Mummy in the foothills

Yes they can take ages to close unlike a regular sale for 30 or 45 days.
From what I was told you are also liable for any liens against the house, like unpaid taxes, water bills or bonds etc.
The one next to us finally sold I think it actually sold over Christmas and the man is here fixing stuff to move in. The old owners had taken all the electrical fixtures with them.
Another thing when you buy normally, after inspections you can get the owners to pay for some repairs etc, with foreclosure you are on your own.
I suppose if you have time and a talent for fixing things, they could be a real bargain.
We have two foreclosures left in our tiny bit of the neighborhood, two have sold.
One is half finished it hasn't even had the electric hooked up, the other is an old house that looked like everything that could be ripped out of it was taken when the owners left, it's totally wrecked.

Michael

If you are referring to a foreclosure auction, then yes you are responsible for any liens on a house. Generally the bank will win the auction and bidding and closing process can be complicated.

http://www.realtytrac.com/foreclosur...t-auction.html

However, purchasing a foreclosed home is different. The bank has already repurchased the home (foreclosure auction) and the title should be cleared. When you purchase a foreclosed home, you go through the same procedure as a non foreclosed home purchasing title insurance against liens. Generally the disadvantage of a foreclosed home is that they are usually sold AS IS and can take slightly longer to close. Sometimes the previous owner could have ripped out appliances or damaged the home. Since there is only one owner (the lender), this process of buying a foreclosed home isn't much different than buying any other home but can take a little longer since someone at the bank has to approve the sale (generally takes longer than an individual approving a sale).

You may be able to get a good deal on a short sale (owner is selling property with the approval of the bank prior to a foreclosure at less than owed). When purchased the title will be cleared (title insurance purchased), the home is generally sold AS IS, and closing can take a very long time. The reason closing can take a very long time is that there may be several mortgages on the home and all lenders have to agree to the price of the short sale (a second mortgage holder will normally not agree unless he gets money so therefore the different lenders internally negotiate how the money is divided). If there is only one mortgage on the home (or all mortgages are owned by the same lender), closing can be much easier and faster. Generally you need a realtor that specializes in short sales to get you over the issues.

Duncan Roberts

Remax are said to be the foreclosure experts, at least around here. Just bear in mind that the process can be very slow when submitting offers and you may not even hear back. Also remember that you are still allowed to write an offer contingent on a home inspection, the big difference between a foreclosure and a "normal" sale is that if there are issues you almost certainly can't get them fixed so you have to either buy as is and fix them or back out.

Tarkak9

Bollox. (sorry D, not jabbing directly at you although it appears as so) Like anywhere, there are good agents and bad agents. They would like you to believe by means of their adds that they are the best because they want your business; its PR... but like any profession, it boils down to the individual. The likelihood that any real estate transaction occurring in today's market is a foreclosure or shortsale is pretty high, so that's why all the bigwig companies and NAR are advertising as 'specialists' in that field b/c its a big market.

The secret to foreclosures is patience and due diligence.... its a hidden liability until proven otherwise is my stance. Inspect, inspect, inspect... right down to scoping the sewer line to ensure that someone hasn't poured cement down the drains - that does happen, seen it.

imo what people don't seem to understand that bank owned properties are subject to normal market value too, like any other property for sale... it just so happens that the owner is a bank rather than a private individual... but they may be inclined to undercut private homeowners just to clear their inventory. Don't automatically assume that since its bankowned that it is a bargain - they're trying to get as much money as possible... basically what the market will bare. Sometimes it can cost you more out of pocket to deal with the bank because of the repairs involved etc.

Have a clear understanding of AS-IS in relation to the transaction... is it pertaining to the physical condition of the property or is it constructed around that your locked in and no matter what you're buying the house!! (ie do you have any outages w/o jeopardizing any money). The bank addendum(s) are written in their favor so ensure you know what your signing.

Banks are like Vegas... the House never loses!!

You might want to also double check the insurance ahead of time too because many insurance companies are becoming leery of foreclosures and premiums may be different purely because the seller is the bank.

Duncan Roberts

Maybe, but the realtors that told me they were foreclosure experts were not Remax agent and were not fans of Remax for the very reason that they do a lot of foreclosure work which is not fun for a buyers realtor. I agree with the good/bad agents but you're more likely to find a good one specializing in foreclosures if that type of property is passing through their agency more often than others.

avanutria

Find half a dozen agents in your desired area and contact them - phone, email, visit, whatever YOU prefer. See who writes back in a timely fashion and appears helpful and knowledgeable. Ask them all the same questions and see if anyone gives wildly different answers from the others.

We found an agent here in Oregon back before we even knew what year we would be moving. We were estimating five years at the time, but she waqs still happy to give us information and send us a relocation package in the mail. By the next year we knew we were moving earlier than we'd thought and wrote her again. She arranged for house viewings when we came to visit the area to see if we liked the town - again knowing that we were not in a position to buy yet.

The right agent will be happy to work with your requirements, and will also be brave enough to speak up if he or she is not the right one for the type of house (foreclosure etc) that you are looking for. Start by finding that right agent.

Tarkak9

Law of averages are at play and different regions have different environments. There are rotten apples in every orchard. Sounds to me that those other agents are shooting themselves in the foot and choosing to be enemies of the market which they are in and have no control over - a bankowned transaction is the nature of the beast; ie deal with it despite who'se sign is in the yard. I work primarily with buyers and about 60% of my buyer transactions involve bankowned properties... and some of the sloppiest transactions have been with agents with a balloon because either they don't care what they're doing or just don't know what they're doing and the legal ramifications of their actions; then again, some of my best transactions have been with balloon agents. I used to be with the same balloon outfit - its not all what its all cracked up to be! Like I said, bad apples in every orchard.

Bob

Search out Steerpike's posts, has a good thread on foreclosure going over the whole process he went through for a place in AZ.

Michael

That was not a foreclosure but a short sale.

Bob

I thought the place was a foreclosure...oh well, pretty sure it came up recently though.

Sally Redux

At what stage are the liens disclosed? I only became aware of this issue by knowing somone who is walking away from a house with a substantial lien on it.

Michael

Under most circumstances there shouldn't be any liens on a home and should have been cleared prior to selling. Normally (unless agreed to in the contract), the seller pays off all liens prior to the sell. However, usually the purchaser has a title search performed and title insurance purchased to cover the possibility of liens or title problems on the property.

Sally Redux

OK thanks, so worst case it would come up on a title search.