Foreclosure houses

[LindaL]

I have some questions for those who are in real estate or have bought a foreclosure house before...specifically a HUD owned home. When an ad says "foreclosure" or "REO" can it also be HUD or do they only advertise a HUD as a HUD and not anything else? Should I only work with an agent certified in foreclosures? Is there anything that is "hidden" (not well known) when buying a foreclosure (HUD)? Tell me the good, bad and ugly........

 

[Boss Mare]

I have crappy credit from many years ago. My mortgage lender suggested against a HUD home..

Plus side of a HUD home is they include expenses to fix it in your loan.

They also have a 203k program for fixing up houses you currently own or purchasing.

 

[Performancemini]

My son looked at some foreclosure houses before he bought the one he has. There are definitely some differences between them and regular sales. HUD houses are not foreclosures; but I am not sure if a foreclosure can be a HUD also (so I am no use there, sorry). Early on, one of our houses was a HUD style mortgage. Every time my husband got a raise, they took it and added it to the mortgage. So, saving money-wise we never could get ahead. We stayed in that mortgage for almost ten years, not smart. We should have sold or switched over after two years, like our neighbors (who had the same type mortgage) did. I think having a VERY knowledgeable realtor in HUD and forclosure mortgages would be a good idea. Make sure you are very clear on all the aspects of everything involved in whatever you are looking at. HUD's help a lot of people out. Foreclosure's can get you a good deal on a home that should be priced a lot higher. But make sure you have a good inspector go over the homes to make sure there are no hidden defects. I am not a realtor; but my sister worked for an appraiser and a realtor for a number of years and I learned some things from her; plus our own experiences over our years. Just do your research.

 

[LindaL]

HUD foreclosures are FHA loan houses sold back to the bank. That is the only difference between HUD and other foreclosures (FHA loan). The loan on a HUD home would be an FHA loan with $100 down. There are credit and income limitations on that type of a loan. I have been reading a lot on the different types of loans, houses, etc. I do agree that we need to have a realtor certified in foreclosures. While we are not quite ready to do any actual shopping, we have been looking at different houses/areas (outside) and have some ideas on what is out there. I just want to be as knowledgeable as possible before diving in!

 

[Marty]

I'm not sure if its the same in every state or if it varies. But the only thing I can say to you about it is to go to your bank loan officer and ask some questions about it there. They always know about this kind of thing and should be able to answer your questions accurately.

 

[Charley]

When we were looking at houses about 7 years ago we came across a nice home that was a foreclosure. We put an offer on it. We soon learned that we would be buying it "as is". So buyer protections that are extended to buyers by the VA home financing or FHA financing would not be available to us. We also were told that it would not close as quickly as other homes. We have always had a property inspected and re-negotiated costs of repairs and this would not be something that we could do on a purchase of a foreclosure being bought "as is" with the bank we would be purchasing the home from. Other than this experience, I don't know anything about foreclosures but hope this gives you a little more to consider with your purchase. Good luck with you house hunting! Hope you find the perfect property!

 

[LindaL]

One of the things I learned while researching this is...when you have a home inspection done, you ask the inspector to write in ANY repairs/renovations the house needs, so that it can be written into the loan...meaning the bank will give you extra money to get everything done that was on the list. Usually a home inspector will only worry about repairs needed, but if you tell him to write in kitchen "repairs" or bathroom 'repairs", he will do that. So, "as is" doesn't really scare me.

 

[Marty]

We actually bid on two foreclosures years ago. One thing I found out here is that they do not want to play ball. Highest bid wins, end of story. They don't care what is falling apart and needs to be fixed. No negotiating, no nothing. And it was like a big secret or something that they don't give you any information about how many other bids they are looking at. That's how it is here, don't know about there. Kinda nuts.

 

[LindaL]

That is true about the bidding. You really have to bring your "best and final offer" to the table on a foreclosure, because the banks really don't care about anything except the best offer. A lot of people are scared about trying to get a foreclosure and the wait it sometimes takes, but I am not. Luckily, too, we are in a month to month rent situation (after a 2 year lease) and so we don't HAVE to be out by a certain date.

 

[Sonya]

We bought a foreclosure for a weekend home 4 years ago...no inspection allowed, as is. They wanted it moved fast, no messing around. We were paying cash so we we got the house over someone who needed a loan and put the offer in 2 days prior to us...our offers were the same, the asking price.

 

[Ashley]

It varies by state. My ex and I bought I forclosure. We had a home inspection, sewer/well inspection done as well as we low balled them with counter offers 2 twice before we settled.