topic Re: Purchasing Foreclosure Home in Mortgage Loans

Purchasing Foreclosure Home

DeadlyPersona — Wed, 24 Jun 2020 05:54:05 GMT

I'm in the process of getting my scores up and while I have some free time I have been researching home buying. I'm really interested in foreclosures because it seems that it would be less expensive and a lot of the homes that I've viewed (virtually) in the North Carolina area are move-in ready. What I need advice on:

Should I get an agent's help prior to searching for a foreclosure or when I see a foreclosure I like just speak with that specific agent directly?

Would you recommend buying the pre-foreclosure homes or the foreclosure homes?

Re: Purchasing Foreclosure Home

NC_Mtg_Loaner — Wed, 24 Jun 2020 14:02:32 GMT

Good question. When buying ANY home, your agent's commission is paid by the seller. That doesn't mean that you shouldn't talk with the seller's agent directly if you don't already have an agent, but until you have an agent representing you be aware that they all work on commission and many will want your autograph on paperwork before they go showing you homes which you shouldn't be shopping for until you are pre-approved, so talk to a lender first. Or talk with a few agents to get recommendations about a lender and have the "pre-foreclosure/foreclosure" talk. It can be a nightmare if you don't know what stage the "seller" is at in the process.

I've noticed recently that FNMA and HUD have a nice selection and I'm pretty certain the COVID-19 crisis will generate some more opptys in the near future.

Due diligence is critical on these homes as the seller isn't required to disclose any information about the property so you often need to assume the worst when planning for 'repairs' to make the home habitable or to your level of comfort.

Talk with your lender as well so that you understand the best loan program for you and be certain that program and loan product can be used to finance the purchase of your property.

Re: Purchasing Foreclosure Home

Anonymous — Wed, 24 Jun 2020 14:07:50 GMT

Something else you may want to look into... You can find buying agents that will give you a percent of of their commission back at closing. So you can use that money to help with the closing fees. I did that recently when I bought a new build. There is a large website where you can get agents to give you proposals on the rate they will give you. Worked out well for me.

Re: Purchasing Foreclosure Home

CA4Closure — Mon, 20 Jul 2020 16:49:58 GMT

I bought a foreclosed home in Hawaii but I used a Foreclosure Specialist Real Estate agent. I found the home in a short sale. I then contacted the homeowner that I was interested in the home. Nothing came about it so I sought out the best foreclosure specialist in the community was interested in.

She contacted the homeowner's bank with my proposal. The homeowner owed $650,000 (comparable homes were selling in the $900,000 to $1.2 million range) with no other encumberances. The house needed work and I had my cousin who is a contractor look over the home and I made an offer of about $400,000. My FICO score was in the 845 range across all three credit bureaus and I had the cash down payment plus NFCU agreed to carry my mortgage. Bank kept wasting time so I had other foreclosed properties I was looking at too. But this was the house I wanted. Finally, the bank came back with a counteroffer of $500,000. My agent then countered with $385,000. Of the three potential buyers, I had the best cash down payment, financing and higest FICO score. The bank and I finally settled on $390,000.

By this time, the former owner had vacated and the house was relatively clean for a foreclosure. We closed two weeks later! I put in $250,000 in upgrading the kitchen and bathrooms, update electrical wiring and some plumbing, ripping out carpeting and replacing this with wood floors, new windows/doors/sliding glass doors, air conditioner and water heater. Relandscaping will take place next year.

I have been approached from other real estate agents that people want to buy my house. As of last week, my home could sell for $1.6 million.

BANKS wants to get the highest price possible. DON'T fall for their shennanigans. Stick to your guns and your agent will successfully win you the foreclosed house. My agent was paid by the former homeowner's bank. They were desperately trying to unload this house!

Re: Purchasing Foreclosure Home

DeadlyPersona — Fri, 31 Jul 2020 11:47:10 GMT

Wow! That’s awesome 😎 thanks so much for sharing your story.