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Has anyone bought a short sale or foreclosure

Has anyone bought a short sale or foreclosure

Old Sep 2nd 2012, 5:33 pm
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Default Has anyone bought a short sale or foreclosure

This is somewhat putting the cart before the horse. We could be moving to WI sometime later this year or early next. I know the procedure may be different in different states though when you go about buying a short sale or foreclosure property and they maybe in a bad state of disrepair. We are looking at normal for sale houses as well, if we have to move sooner rather than later, and do have a house to sell as well. Any ideas from someone that's done it or looked into it seriously. Thanks.
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Old Sep 2nd 2012, 5:39 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by joto View Post
This is somewhat putting the cart before the horse. We could be moving to WI sometime later this year or early next. I know the procedure may be different in different states though when you go about buying a short sale or foreclosure property and they maybe in a bad state of disrepair. We are looking at normal for sale houses as well, if we have to move sooner rather than later, and do have a house to sell as well. Any ideas from someone that's done it or looked into it seriously. Thanks.
Sorry I can't help you but if you search through Steerpike's posts I think he's posted in detail about this.
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Old Sep 2nd 2012, 7:38 pm
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Default Re: Has anyone bought a short sale or foreclosure

Here's my old post from May 2009 (wow, how time flies!).

http://britishexpats.com/forum/showthread.php?t=606770

I don't have time to read it all in detail again, but I will say, on reflection, I was overly optimistic on the market, and am still 'under water' on that purchase. You would hope that things are different now, 3 years later. However, one could say that is a general commentary on buying real estate in general, and not short sales in particular; I do think I got the property for less than what others were selling for in the neighborhood at that time.

I paid $150k for a condo that had previously sold for around $300k, so I thought I was way ahead. Identical condos are now selling for $100-120k.

The process was very easy and fast for me (contrary to what I had expected). I eventually re-financed with a conventional loan, which was a painful and tedious process, but I was in no hurry.

I would have been much better off renting, however.

Whatever else you do, take your time and get to know the area / neighborhood. You should never rush into any purchase, but buying into a new area is especially risky - you may buy and then find you don't like the neighborhood, or that there are better neighborhoods in the vicinity. Rent for 6 months in the area and get a good 'feel' for the place would be my advice.

ETA: there are different pricing strategies for short sales; some sellers ask for a reasonable price from the get-go, while others post an unrealistically low price to attract attention. Unlike conventional sales, the seller is NOT obligated to accept a full price offer (not obligated to pay commission on one would be more accurate). So don't get too excited about the 'asking' price.

Last edited by Steerpike; Sep 2nd 2012 at 7:46 pm.
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Old Sep 2nd 2012, 7:40 pm
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Default Re: Has anyone bought a short sale or foreclosure

Is there really an advantage to buying either? The place next door to us is up on a short sale. They're still asking the market price for it. It just means that the people selling it only have to pay off around $150k of the $270k they borrowed.
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Old Sep 2nd 2012, 8:05 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by cluedweasel View Post
Is there really an advantage to buying either? The place next door to us is up on a short sale. They're still asking the market price for it. It just means that the people selling it only have to pay off around $150k of the $270k they borrowed.
That's what they are asking, but - you could offer much less and it may be accepted. The point is - if it is being sold 'conventionally', the owner makes the decisions, but if it is being sold short, the bank gets to make the decision. The banks may be more pragmatic.
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Old Sep 2nd 2012, 8:13 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by Steerpike View Post
That's what they are asking, but - you could offer much less and it may be accepted. The point is - if it is being sold 'conventionally', the owner makes the decisions, but if it is being sold short, the bank gets to make the decision. The banks may be more pragmatic.
Fair enough. I guess it's one of those situations where it depends on the bank.
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Old Sep 2nd 2012, 8:41 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by Steerpike View Post
I would have been much better off renting, however.
Strangely enough, rents have held at around the same level while house prices plummeted in the metro Phoenix market. In addition, the Phoenix market seems to have hit the bottom and started the slow climb back up provided you didn't buy somewhere really stupid like the outlying areas. Given that, you can't be too far off hitting the break even point for buy over rent.
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Old Sep 3rd 2012, 7:10 am
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Default Re: Has anyone bought a short sale or foreclosure

I bought a "HUD" home 2.5 years ago. It was auctioned online. I bid the reserve price and won. It took 9 months to close. However in the end I am satisfied with the deal.
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Old Sep 3rd 2012, 2:11 pm
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Default Re: Has anyone bought a short sale or foreclosure

How does one typically go about finding a foreclosure? We've asked at several banks & they basically blew us off. We've also enquired of our regular buyer's agent & SHE blew us off. "Oh you don't need one of those."

Recently saw a sign in a window for Foreclosure Specialists, stopped the car, went in, & got the usual buyer's agent type speech that we've heard ad nauseum. We don't need a buyer's agent, we perhaps need some kind of foreclosure specialist agent, but those seem thin on the ground & hard to locate here.
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Old Sep 3rd 2012, 3:59 pm
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Default Re: Has anyone bought a short sale or foreclosure

We were going to buy a foreclosure, but once the inspection had been done, there was black mold present, the whole basement would have needed re-done, and it just escalated to the point, where it would have taken over $100,000 to fix things, which we just didn't have. In order to do the repairs, we would have had to go for a different kind of mortgage to finance some of the repairs, and it was just way too complicated. The house eventually sold for way below market value, I just hope whoever bought it, is either in the building/renovation business, and also got a complete inspection done.

We also looked at a short sale, once again, it needed a new septic etc, it's still sitting on the market, been up for sale for nearly 2 years. I don't know how you specifically look up foreclosures, we just saw it on Listingbook......
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Old Sep 3rd 2012, 5:20 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by WEBlue View Post
How does one typically go about finding a foreclosure? We've asked at several banks & they basically blew us off. We've also enquired of our regular buyer's agent & SHE blew us off. "Oh you don't need one of those."

Recently saw a sign in a window for Foreclosure Specialists, stopped the car, went in, & got the usual buyer's agent type speech that we've heard ad nauseum. We don't need a buyer's agent, we perhaps need some kind of foreclosure specialist agent, but those seem thin on the ground & hard to locate here.
Banks will blow you off. Once a property is undergoing its 4clsre proceedings... its with their legal channels so they won't comment on anything. Agent blew you off more than likely b/c they can be more of a nightmare than anything else. You'd think it'd be e-z-p-z with a bank - "what you see is what you get, give us the money, we'll give you the deed"... but its not; banks often are a PITA and drag feet etc; often its worse with a shortsale.

-'foreclosure specialist'/buyer's agent - often one of the same thing... its more of a marketing thing to try to procure clients as more people seem to be interested in 4clsres thinking they're getting a deal of a century. No such thing as a cheap house - they always sell at market value!!

If you're wanting to know what properties are headed to 4clsre you're going to have to comb thru public records or obtain the lists. But its quite common for a MLS database to indicate if the owner is private or REO w/o looking it up in the public records, which entails working with an agent.
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Old Sep 3rd 2012, 7:14 pm
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Default Re: Has anyone bought a short sale or foreclosure

Here is my thread from oct 2009

http://britishexpats.com/forum/showthread.php?t=633243

The lead Paint got sorted just before Christmas. They Painted the whole house white and that was it. (But nobody told us it was done, till I did a drive by!)

The same appraiser came back on Xmas Eve, and ok'd it for HUD sale /FHA purchase.

Then my Lender (Suntrust) got tied up in FHA rules and wanted a termite clear certificate. There were termites, and that was on my list to do as soon as closed and before move in. Anyway we went round and round and eventually they let it slide and I closed at the end of Jan 2010.

As for value, according to my Tax bill /assessment the value dropped from 63k to 56k in 2011 and to 46k in 2012 (from about 150k for previous purchaser in 2007 I think).

Edit: Meant to add - I used ziprealty.com to search properties. There is a filter for foreclosures or short sales. Sure there are others. And Hud.gov after I found the house, has all the appraisal info etc on there properties.

Last edited by RICH; Sep 3rd 2012 at 7:17 pm.
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Old Sep 3rd 2012, 8:58 pm
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Default Re: Has anyone bought a short sale or foreclosure

Originally Posted by Tarkak9 View Post
Banks will blow you off. Once a property is undergoing its 4clsre proceedings... its with their legal channels so they won't comment on anything. Agent blew you off more than likely b/c they can be more of a nightmare than anything else. You'd think it'd be e-z-p-z with a bank - "what you see is what you get, give us the money, we'll give you the deed"... but its not; banks often are a PITA and drag feet etc; often its worse with a shortsale.

-'foreclosure specialist'/buyer's agent - often one of the same thing... its more of a marketing thing to try to procure clients as more people seem to be interested in 4clsres thinking they're getting a deal of a century. No such thing as a cheap house - they always sell at market value!!

If you're wanting to know what properties are headed to 4clsre you're going to have to comb thru public records or obtain the lists. But its quite common for a MLS database to indicate if the owner is private or REO w/o looking it up in the public records, which entails working with an agent.
Thanks once again for your helpful input, Tarkak. What you say explains a lot that's puzzled us.

Originally Posted by RICH View Post
Edit: Meant to add - I used ziprealty.com to search properties. There is a filter for foreclosures or short sales. Sure there are others.
This site is great! (Or rather their partner site in the northeast realtytrac.com.) As is the site Brat1 suggested. Both these sites have many more foreclosures than Zillow....
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Old Sep 3rd 2012, 10:21 pm
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Default Re: Has anyone bought a short sale or foreclosure

http://www.trulia.com is another site where you can filter by foreclosure type.
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Old Sep 4th 2012, 3:18 pm
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Default Re: Has anyone bought a short sale or foreclosure

We just bought a house in a regular sale here, but we were also looking at foreclosures and short sales.

The big issue with foreclosures was that they were usually in a bit of a state (right down to the holes kicked in the wall and the blood on the carpet, I kid you not) and they are sold "as-is, where-is", which means that the seller isn't responsible for anything that is wrong with them. Plumbing ripped out in the middle of the night? Tough. Someone burned down the house the day before closing and you didn't already have insurance in place? Guess you bought a smoldering pile at the agreed price. I'm pretty handy but I wasn't too keen on places that needed a lot of renovation work - heck, most of the foreclosures almost needed gutting.

The short sales we looked at usually were in decent condition, you just can't buy one if you are in a hurry so it's a bit harder to shop for them and you have to budget carefully as you usually can't lock in the interest rate for that long, so don't buy at the absolute top of the budget and then find that the interest rate on the mortgage has gone up.
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