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Are foreclosed homes easy to buy?

Discussion in 'Real Estate & Property Investing' started by Jessie Johnson, Dec 3, 2010.

  1. Jessie Johnson

    Jessie Johnson LoanSafe Member

    So I'm looking to buy a home, which will be my third home I've bought in my life(I move about every 5 years). I usually don't have any trouble paying for the home, or getting the mortgage for it, but I'm looking for a 5 year fixed rate mortgage.

    I was looking through some listings, when in popped in my head that a foreclosed home might be cheaper than a home that is sold traditionally by the seller. Is this idea true. If so, is the process easier, or would it be more difficult to obtain? Is there any other way I could get foreclosed home besides a foreclosure auction?

    I'd appreciate any advice, or comments on my idea!
  2. Angels

    Angels LoanSafe Member

    Contact a realtor, the process is nearly the same and the realtor can help guide you through it.
  3. TomEason

    TomEason LoanSafe Guide Staff Member

    Most smart real estate investors are buying REOs directly from the lender - owner. This is cheaper than buying a short sale or at a foreclosure auction. The challenge is finding one you want to occupy, and then getting your offer accepted. Since there are many other buyers attempting to buy REOs, you will often be in a multiple offer situation, i.e. competing with other buyers. Good luck!
  4. judithoo5

    judithoo5 LoanSafe Member

    My brother just bought a foreclosure house in New York and basically it is the same process...
  5. webspider

    webspider Banned

    hello friends
    You don' think it would be better to wait until the market improves
    and then unload these houses and recoup more of these losses.
    thanks
  6. calgirl67

    calgirl67 LoanSafe Member

    Do your homework

    REO sales are different to traditional sales in that you get NO disclosures about the property, and the selling bank makes you sign a bunch of papers disclaiming them from:

    * Any clouded title issues
    * Wrongful foreclosure action down the line from previous owner
    * "As is" sale.. no repairs or warranties
    * No known history or knowledge of defects, repairs needed

    Personally I would not but one.
  7. TomEason

    TomEason LoanSafe Guide Staff Member

    calgirl67

    Thanks for your post. The caveats you listed are valid. Buying REOs is not for amateurs. Experience pros buy them because of their huge price discount and because they do know how to do their due diligence.

    Many pros are active in this market. Acquired properties are either fixed and flipped or are retained in the investor's rental portfolio.
  8. Cat Damiano

    Cat Damiano Mortgage Wars

    I agree with Tom, several of my investors were also contractors specifically purchasing for the purpose of fix and flip. They have their own inspectors on hand that put a flip value to the property based on the work needed. Definitely not for the amateur.

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