Buying a Foreclosure

lildevil968

What is the process, how long does it take to close, and do you pay the banks asking price?

bearkatjen

We are in the middle of buying a foreclosure. The length of time is really dependent on how fast the bank moves. We made our first offer early November and it took a few days for a counter offer. We immediately countered that offer and we did not receive the counter from that offer until the week of Thanksgiving. We signed and turned in all the paperwork that week, and it took a full week for the bank to sign the agreement. Right now we are in the Pending Option stage, and are booking an inspection asap. The goal is to close December 14th. We are able to take care of our side of things pretty quickly, but it seems we need to leave a lot of wiggle room for the bank.

We did not pay asking price. Our initial offer was 10% less with seller paying closing costs, and we finally agreed to 6% less than asking and seller paying $5600 in closing costs, which will probably leave us paying about $400 in closing costs. The seller also threw in a home warranty.

You cannot renegotiate price after the inspection, so take unexpected costs into consideration when you make your offer. The home we are buying is only a few years old, has not been vacant very long, and when we walked through nothing really stood out as needing repair. Still, you never know, so the Home Warranty is nice to have, and getting the seller to pay more of the closing costs, so we have more cash on hand for unexpected repairs, was important to us. 

pc150805

We did pay full asking price because it was reasonable. We paid cash but it took FOREVER because new liens kept popping up. We also had issues with the occupancy permits and inspection. We did end up closing about 2 months after our initial offer.

lildevil968

Thank you for your reply. We looked at a foreclosure this weekend, where ready to put a bid in on it, and then we walked outside. Right behind the house was about 20 ft unsecured rock cliff which would cost about 10-30k to fix, and would have to be fixed immediately. Because it is a high flood area, the unsecured rock is a major issue, and we decided against the house immediately. However, we are starting to really look at foreclosures, and i did not know the process, so your response really helps :-)

ETA: The cliff was about 15 ft away from the house, basically the back of the house butted right up against it.

pc150805

Sorry that one didn't work out! When you're looking at a foreclosure, be sure to consider it "as is". It's not truly an "as is" only situation but you are very unlikely to get much from the bank. Also, what happens a lot is that they will get several offers and then give you a deadline to give them your absolute best offer. For example, with ours, we put in an offer on Monday. They came back and said that they had several offers and are going to wait until Friday to make a decision. We had to submit our "best and final offer" on Thursday. So basically our first offer was rejected even though we put in the same offer on Thursday and it was accepted.