Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Buying a Foreclosure..??
Hi nesties.. So I am a pretty "new" newlywed (Dec. 1) and we have been living with my MIL (yes I know.. *sigh*) for way longer than planned and to boot I got laid off in October.. so with all that.. My husband and I have been looking at rental properties (2-3 bedroom houses) we are both pretty tired of apartment living so really like the house idea.. but budget wise it's pretty tight. So we came across some foreclosures and I will admit some are really impressive.. but I am really not too familiar with foreclosure process and would like to know if anyone has experience buying foreclosures etc? I know it's an AS-IS deal but not so much on pros and cons.... any advice appreciated!!!
Thanks!!!
Re: Buying a Foreclosure..??
I don't know much about buying foreclosures myself, but might I suggest one thing - and it's really none of my business, but do you guys think it would be a better idea to hold off buying anything until you are back to work? Just so you have the security of the extra income. Unless you buy something where you can cover all expenses on one salary. (not a bad idea really even if you both were working) I know it sucks living with your MIL - believe me, been there, done that....we lived with mine for 3 months when we first moved back from Spain and it was not fun, but I am grateful that my in laws were there in a time where we really needed them.
We actually considered buying a foreclosure ourselves, but were told by a realtor we were working with that buying foreclosures is a p.i.a. Not quite sure why since you are dealing with the bank directly vs a short sale where you are still dealing with the seller and then the bank. He said most of the time, cash buyers will come in and buy the foreclosure properties and banks tend to prefer those because it is all cash/done deal. That's about all I know though....would be curious what other ladies on this forum have to say about this subject myself.....
In regards to purchasing a bank-owned property, it's easy. Ours was no different than a typical purchase. Although most advertise "as-is" we were able to get a few things fixed by the bank in order to pass FHA inspection. We also got a significant credit towards closing costs.
That said...if money is tight, buying a home will likely make it worse. You'll have to qualify for a mortgage based on your husband's income only (obviously). Then, factor in at least 3.5% down, closing costs, property taxes, insurance, repairs, upkeep, etc., and I would guess that you'd be better off renting for awhile.
Ditto this. We recently sold and bought a house so we already had all the stuff needed for start up in the house and we have still had to put in over $5k in the last two months. That doesn't even include the fact that we have had to replace the hot water heater and the fridge when they went out so there is another $3k. Both were in fine working order when we bought and our inspector said they looked fine but stuff happens! That is the risk of buying a house. If we didn't have a healthy savings we would be up sh!t creek without a paddle two months into owning this home!
I'll only comment on the foreclosure purchase aspect of your post--we purchased a foreclosure in August and the negotiation process worked just like a traditional sale--a little slower since the bank doesn't work on weekends. We ended up paying quite a bit less than list and we successfully negotiated some significant ($$$) repairs (so as-is is not always "firm).
The thing with SS and foreclosures is no two are alike. It really depends on the monetary bottom line for the bank since they are not emotionally attached in the same way a traditional seller might be to the property.
My Valentine Bookends (2~13~13, 2~15~09)
Thanks ladies... As for the money/job part, we have NOT been looking to buy but when we came across so many foreclosures that were so much cheaper and most bigger than rentals we could afford thats when we started looking into the possibility that monthly payments may be cheaper (more bang for buck) than on alot of rentals.. so guess like everything else it's all about weighing pros and cons.. *sigh*
*Trying to keep my head up*
Just keep in mind that the cost of home ownership is SOOOO much more than the difference in monthly payments when you compare rent to mortgage. You need to look at the total cost. Owning a home is almost always going to cost you more than rent--you increase the cost of insurance, taxes, maintanence (both inside and outside), utilities, etc.
My Valentine Bookends (2~13~13, 2~15~09)
There's no reason sad about renting! Believe me, there are plenty of people out there who wish that they were renters, instead of owners, especially over the past few years. When my water heater sprung a leak overnight and slowly sprayed water over my entire garage, I wish I had a landlord to call. When our dishwasher died, no landlord to fix. When I realized we'd lost over 30% of purchase value and were upside down on the mortgage, too bad. I could go on and on....Owning is fantastic, when you have plenty of money in the bank to deal with these things. When your dollars are stretched, finding a nice rental and passing all the responsibility on to the landlord is the way to go.
Another thing to think about, especially when looking at bank-owned, is that most need some sort of immediate repair. The bank paid to fix items needed for FHA, but we sunk at least another $15k into it within the first year.
My advice (even though you didn't ask for this part of it) - Enjoy being carefree with a rental! You have plenty of time to save money for a money-pit house later
Owning a home can suck far worse then renting. Would buying a home now, with your present circumstances, be in your best interests long term? It is easy to talk yourselves into buying when foreclosures and interest rates are so cheap. thine enemies many foreclosures weren't kept up by owners who couldn't afford maintenance and aren't kept up by banks who don't care and your it of pocket expenses to get it livable can get high quickly. What if you need to relocate for a new job and cant unload the house, but cant afford to decline the job offer? I encourage you to think further out than your current needs. good luck
My DH and I bought a foreclosed home and the sale was really pretty easy. We shopped around a lot, and found something that was in a good neigborhood that didn't really need any repairs.
We had my father in law look with us, because he is a very handy man and knows all about electrical, plumbing, etc. Make sure if you decide to look at properties that you have someone with you that will know what to look for (roof damage, pipes, etc.) So many times these properties are not winterized correctly, and as soon as the water is turned on, there could be a big potential problem (this happend to a friend of mine!)
When we bought our home, we purchased it for a very low price (this is definately a buyer's market IF you are sure you can cover the costs of closing, down payment, appliances if needed, taxes, etc.) You can check your state government website and view the taxes on the properties you are looking at, our home had very reasonable taxes.
As you mentioned, when we were looking, we found that many of the properties were within our budget, in that including insurance and taxes, the monthly mortgage payment was significantly lower than renting. It has been a really good deal for us. Just make sure before you make any decisions, you really know what you are getting into! The home we bought was a little out in the country so we don't have to pay water since it is on a well, which was a plus!
Also make sure you look in to the area. The location means so much when you buy a home, because it determines so much of the value of the property. Check school zoning, and comparable prices in the neighborhood, what did other houses similar sell for etc.
Now can be a great time to invest in a home because of the incredibly low interest rates! Just remember as everyone mentioned before me, there are many other costs to owning besides the monthly payments. Make sure to get a good inspector!
The home we purchased sold in 2008 for $120,000 and we purchased it for $47,000. We feel incredibly blessed to have found a deal that worked so well for us. We now have a big yard for our puppies to play in!
Don't rush into anything. There are great deals out there, but there are also some terrible ones! Rent until you know you have found the right one and know you can afford it! We also lived with our in laws for awhile. It was great for us (though definately a rough time) because it enabled us to save a little more to have some extra $ in the bank to be sure we would have a safety net after paying the closing costs, dp, etc. Sometimes you can even get the bank to cover the cost of closing.
Good luck in making the right decision!