Foreclosures

sam19

Has anybody here bought a foreclosure? Would you buy one?

Me and my husband are looking into a forclosure. It looks like it would need some cleaning up and updating but it doesn't look to be in too bad of shape. Of course, we would get it inspected to make sure there weren't any major issues that needed to be addressed. Looking at a mortgage calculator it looks like our payments would be in the $300 range which is about what we pay right now in rent to my brother.

houndbaby

My house was a foreclosure. You have to be really careful with foreclosures and they can take awhile to close on. Mortgage calculators don't take into acct. home owners insurance which is usually added into your monthly payment, property taxes which can be added into the mortgage payment and also mortgage insurance which is required many times if you don't put at least 20% down. We don't pay mortgage insurance because we got out of it with our first time home buyers program. If we would have put just the cost of the home into a mortgage calculator it would have been around $400 a month. When you add in our home owners and property taxes, we end up paying $700 a month.

I have to put Jake down for a nap right now, but I'll come back later and tell you more about my foreclosure experiences.

sam19

Thanks. I didn't even think about insurance and property taxes. I knew it would be more then just rent because we would have to pay for utilities and sewage and stuff. I think we plan on talking to a realtor or something anyways. I just found out that the house we were looking at just sold anways.

houndbaby

If your looking for a Realtor we used Dawn Ronski at Oak Valley and she was awesome. We actually had a hard time finding a Realtor to show us houses because we were looking at homes under $100,000, I think some of them just didn't think it was worth there time.

I would not take Natalie with you to look at foreclosures, a lot of those homes are in bad condition and are not something you would want to expose her too. They look nothing like what they look like in the listings. They don't show you pictures of the gutted kitchens, ruined carpets and busted out windows. With a some of those homes people just left everything behind, we went to several houses bags and boxes were stacked to the ceilings and you had no clue what was in there. In one home it was obvious a cat had been left behind, as there was cat_shit all over the house and it smelled like it had to have died in there somewhere, those people were even kind enough to empty the contents of the refrigerator and cabinets all over the kitchen counters and floor. If a listing only shows what the house looks like on the outside, be very afraid. We went in another house where all the wiring had been ripped out, and another where all the neighbor hood strays had gotten in through a broken window and were living in the house! A lot of the houses we looked at had mold, some just in the basements, some in multiple rooms.

Our home was owned by Fannie Mae, Fannie Mae is a PITA. They waited until the day our offer expired to respond. We tried to set a 30 day closing, well they were slow and there were issues with the title and the parcels of land. So every time the Realtors would get it taken care of to help move the process along, Fannie Mae would come back and say, ok, but this has to be done on our letter head, so we'll have to write it up and send it to you. 30 days had passed before they could even get their act together. In the end I think our closing was pushed out to around 60 days and we didn't get the keys at closing because the Realtor who listed the house was a PITA (GMAC, I would never use them after this). Our Realtor gave us the code for the lock box so we could get in. They didn't come back to get the lock box or sign for like a month.

Even the home inspection was a PITA trying to get the Realtor who listed to get the utilities turned back on so it could be inspected. I will say that our home inspector was worthless (do not use Seagate). If you have a friend or family member who is a general contractor, I would bring them along with you to an inspection. We knew there was a busted window upstairs, what we didn't know until after we bought the home was that all of the windows upstairs were going to need to be replaced because the sashes were rotting, inspector missed that one. He missed that our water heater was basically rusted through and that our attic was a bad habitat. Bats are very expensive to get rid of, and you have to wonder how someone could possibly have missed that when the pest removal guy says it's one of the top 10 worst cases he's seen in 40 years. He also missed that our garage was off the foundation because someone had hit it with a vehicle. I guess that turned into more of an inspector rant, but those are all things you have to accept with a foreclosure because no one is going to fix anything. If you make your offer conditional upon inspection you could back out after that though.

And one last thing to think about with the condition of the house. Before your mortgage can be finalized, the bank will send their appraiser through. If the appraiser finds that the house is not in livable condition they will either deny the mortgage or they will list changes that must be made and when they must be completed by. In our mortgage, we were required to replace the roof and all carpert within 6 months. With the roof, we had to get estimates and sign a contract and the cost of the rood was added into our mortgage and the contractor was paid by the bank then. The roof was $7,000 - $8,000. We had to pay for the carpet ourselves, which was around $5000. We didn't know about those things until we were well into the process, it was another thing that delayed our closing.

If I had to do it all over again, eh, ya, if there were no bats involved. I don't think we will be purchasing a foreclosure in the future though.