Titchski

Reporting from the angry red penis that is Florida...

- our next door neighbours are about to go into foreclosure (house bought for 330k, on market for 199k),
- bloke next door but one is in foreclosure (not sure how much he paid for the house - but he bought a bigger
- house behind us is now owned by the bank (about to have an interesting conversation with them about the ficus bushes creeping towards my pool)
- house 4 doors down is in foreclosure - owners bought for 250k, now on market from the bank for 139k

thats just in a 50 yard stretch, god knows what the rest of our little community is like.

sime303

All I see is bargains galore for the smarter people.

caleyjag

Amen.

jcj

so, has anybody from here bought one of these foreclosure homes?
What's the criteria to buy? Do you have to pay in cash only or a mortgage is fine?
I am moving to CA this month and thinking about buying if I get a deal. Will be renting initially.

Lord Lionheart

I don't think you'll get turned down if you pay in cash

anotherlimey

I will do; I'm still researching but I have a loan "offer" from Bank of America.

jcj

So, no experience of foreclosures for you then.
I was looking at the intricacies of going for one if somebody has experience.

Jerseygirl

I know someone who bought one several years ago...they raised the finance to buy it.

Dan725

Way I understand it, it can be a bit of a pain in the arse of a process. A work friend of mine who recently moved down here has been trying to get one of these "bargains" for the last three months. Seems to be that the process takes ages and you can be "gazumped" at the last minute if someone submits a better offer.

Bargains are out there, thats for sure - but its not as easy as you might think, as far as his experience has been, anyway. Don't think there is any real difference between cash and a pre-approved mortgage.

RoadWarriorFromLP

A lot of people lack sophistication with financial matters. That includes a lot of otherwise perfectly bright, capable people, as well as many in the middle.

In my view, "greed" is a gross oversimplification. It's a combination of hope, fear, a desire to be successful, and buying into the real estate economy.

A lot of people in this country are a few paychecks away from poverty. If all of them waited for perfect conditions, they would never buy anything, and the economy would be even worse off because US GDP is highly dependent upon consumer spending. The feedback loop is more complex than most people realize.

This issue is ultimately systemic. Individuals can't borrow money on these terms if the lenders don't agree to the terms. Since anyone with financial sophistication understands the risk, it's up to them to ensure that the market isn't flooded with mortgage bombs that are designed to detonate whenever the inevitable cyclical downturn occurs. Blaming individuals doesn't accomplish much nor does it prevent the next catastrophe.

Bluegrass Lass

Ok, so I'm going to start a similar business around here and then start selling the household goods on ebay and craigslist..anyone wanna invest? The goods going to waste is disgraceful! I hate to make money off of someone's back, but at least you could get some needed items to people at inexpensive prices.

Tarkak9

You don't have to always pay cash, getting a mortgage is fine (providing you can get one) and it will also depend if it will be your primary residence or not. Banks' requirements are changing very frequently.

Biggest pain in the arse is dealing with the bank... they are notoriously slow to respond to offers... thus allowing and opening the window for more interested parties to enter in the game. I have seen bidding wars on bank properties because of this but usually a bank will want your "Highest & Best" offer in this instance.

You want to do extra due dilegence with buying a bank owned property. My attitude is that they are a hidden liability until proven otherwise. In essence you will be buying it 'as-is' ie. what you see is what you get and they may not be inclined to do anything with regards to repairs etc. Supplemental to the standard RE contract you use to buy, they will always provide and attach their own boilerplate addendums to the contracts - written in the banks favour ofcourse.
Like any transactions - know your legal outages (if any), insert them too and protect your interests as best as possible...otherwise your earnest money is at risk.
Inspect, inspect, inspect... turn over as many rocks as you want including but not limited to things like the plumbing (pressure test it), main sewer line. etc
Title & Title Insurance: damn important.. make sure what you are offered is satisfactory to you and ot on your dime imo. (some banks will only offer basic coverage as its the cheapest but having additional coverage is worth it). Double check if you will be given clean title. Things to really look out for are mechanics' liens as they survive with the property and don't follow the owner
Deed - Very very important too. Typically you will be given a Special Warranty Deed. Know the difference between the form of deeds as they are not the same and they each have varying different legal consequences. eg, a Gerneral Warranty Deed is not the same as a Special Warranty Deed. A Deed & Title are not one of the same thing.
Do your homework. Never assume anything; if you're told something, verify the accuracy to what you're told. Ask Questions - there isn't such thing as a stupid question, its stupid not to ask questions.
Every state is different with regards to RE practices, law and foreclosures.

Trixie_b

I just bought a pre-foreclosed home (short sale) for half the price it sold for in Dec 2005.

Frankly, although it's a nice house, it's not worth more than I paid for it, now or 3 years ago.

We got a fixed 30 year mortgage, paid a down payment and got the sellers to pay closing costs.

Looking for a house was painful, we put offers in on maybe 12... the banks are swamped and can't get back to you quickly, even when the short sale was approved on our offer, someone else at the bank scheduled the house for a foreclosure auction.
They're running round like headless chickens and sitting on paperwork. The competition for these houses is immense. and some properties get between 10 and 15 above asking price offers.

Dan725

Guess I'm just a bit more old school in my outlook - by which I feel the bright capable people of whom you speak are obviously not that bright

The "few paychecks from poverty" people - on the proviso its not self inflicted by Lincoln Navigators and McMansions, etc - I do have sympathy for.

The final point is that I think it is the individuals who make the catastrophe, as what is a free nation but a collection of individuals - a good dose of blame is what is required in my view to prevent the next 'un - this whole "Its alright to be in debt up to your eyeballs, its not your fault" is not helping anything.

Just my 2c's - your view equally valid for a lot of people I suspect, but I'll personally never ever be able to see the world that way.

RoadWarriorFromLP

Being a bit of a tightwad myself who isn't going to lose everything and may even profit from this whole fiasco (I hope), I take your point. However, my point is that the consumers' excessive use of debt is to be expected, and could be easily prevented if the institutions were to return to their former standards of extending credit.

In their role in the marketplace, banks effectively print money through their ability to extend credit, and they abused that printing press with the government's full support. It would be much easier to repair these specific institutions than it would be to revamp the entire civilization's views on consumption and prosperity.