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Anyone with REO / Foreclosure Experience?

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Old 02-25-2008, 11:03 AM   #1
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Anyone with REO / Foreclosure Experience?

So the wife and I are looking to buy a house sometime in the next 4 months to 2 years. Yes, a long timeframe I know. Currently we are renting but have no lease length obligation, so we can stay as long as we want and leave when we want.

I've been looking into bankruptcy homes, foreclosures and REO properties recently - has anyone had any experience with these? Any advice, tips or good resources?

I've done plenty of home remodeling in the past and would actually prefer something that needs SOME work but is perfectly livable from day one. Looking at some online sources it looks like there are dozens and dozens of bankruptcy homes in the area we'd like to live.
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Old 02-25-2008, 11:56 AM   #2
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Re: Anyone with REO / Foreclosure Experience?

Know that almost always with foreclosures you are not allowed inside the house before buying it. Leaving you at pretty elevated risk. You need to get a good deal to make it happen. Things like foundation damage, new roofs, flood damage can eat away a $50,000 good deal real fast.
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Old 02-25-2008, 12:02 PM   #3
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Re: Anyone with REO / Foreclosure Experience?

Quote:
Originally Posted by FRPLG View Post
Know that almost always with foreclosures you are not allowed inside the house before buying it. Leaving you at pretty elevated risk. You need to get a good deal to make it happen. Things like foundation damage, new roofs, flood damage can eat away a $50,000 good deal real fast.
Yeah, that's why I was kind of steering away from foreclosure auctions and leaning more toward REO homes and bankruptcy homes.

Seems like foreclosure auctions would be a decent idea for investment property, but not so hot for a primary residence.
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Old 02-25-2008, 12:33 PM   #4
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Re: Anyone with REO / Foreclosure Experience?

Yeah, foreclosed homes are typically sold "as is," meaning there are no binding representations as to the condition of the home. Additionally, as you may know, banks are less willing to negotiate the purchase price than your garden-variety homeowners. Consequently, you typically must pay the asking price (which is usually lower than the true "market value"). So, while you can sometimes get foreclosed homes at a bargain, you may want to steer clear of them if you are risk averse and check into them if you're willing to take a gamble on getting a home at a real bargain.

I don't know much about REO homes.
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Old 02-25-2008, 01:56 PM   #5
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Re: Anyone with REO / Foreclosure Experience?

Well my wife and I have been looking for a single family home for about a month now. We've seen some Forclosed/Bank Owned/Quicl Sale homes while out. A lot of them are nice homes, with a lot of space the condition of the homes is what kills it. So like FPRLG said you can end up spending the money that you "saved" on repairs. All you can do is keep looking. I practically live on the internet searching for homes. The only thing is finding what we want within our budget.
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Old 02-25-2008, 01:57 PM   #6
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Re: Anyone with REO / Foreclosure Experience?

In a strong buyer's market why waste your time with foreclosures? There are plenty of awesome homes out there right now that are dirt cheap. I would look for someone who is desperate to move and you will be able to cut a nice deal, I am sure of it!
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Old 02-25-2008, 02:07 PM   #7
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Re: Anyone with REO / Foreclosure Experience?

Just make sure you do a title search on any homes in foreclosure to make sure there aren't any other outstanding liens on the property. The other problem with foreclosures is that you have to contend with a bidding war right off the bat. Unless you find one that nobody else wants -- which is a red flag by itself.

REO properties might be a better option. There's plenty of them out there. And the banks want them off their books as fast as possible.

Where are you in the southeast?
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Old 02-25-2008, 03:24 PM   #8
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Re: Anyone with REO / Foreclosure Experience?

here's where I can help. I bought a foreclosed home a year ago. My wife is a realtor and she and her partner specialize in foreclosures. I'm renewing my license in order to help them with the abundance of bpo's (broker price opinion reports) that they've been doing.

Most foreclosed homes are available for inspection. These days banks are starting to even offer a 1 to 1.5% commission to an agent to hold a few open houses on auctioned homes, and if the house doesn't sell at auction they get a regular listing commission to list the house normally.

I don't know where the southeast is, but here in Northern VA you can get pretty good deals on foreclosed homes. Most don't go past the auctions, though. REOs are pretty uncommon if there has been an actual auction take place. There are banks taking a beating right now.

I think there's going to be an end to all this within the next 2 years, as the only banks and institutions able to take on the losses are the largest ones and will need the federal govt's help. They'll get it. I have many family members buying rental properties and we're looking at purchasing a shell of a home in a great area right now, in which we can do most of the work.

I think its a good time to buy the right property. My home was bough for 93K under the appraised value, and our lender even had it re-appraised at their expense to verify. That was a year ago, and there are even better deals right now if you're handy.
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Old 02-25-2008, 03:29 PM   #9
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Re: Anyone with REO / Foreclosure Experience?

in my area most of the reo/foreclosure listings are listed by agents who will show you a home and allow inspections. Even most auctions allow inspections. The AS IS clause comes with buying most homes that you purchase from anyone from a lender, with the exception of buying from property management companies and the transferral of an existing home warranty from a builder.

Here's my wife's website:

Virginia Hometown Realtors Serving Northern Virginia's Real Estate Needs ...

the site is a little jacked up right now for some reason, and you may want to mute it when you re-visit, because that lady is annoying.

My wife is the one on the right with the big smile
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Old 02-25-2008, 03:31 PM   #10
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Re: Anyone with REO / Foreclosure Experience?

short sales are also a good way to save some dough, but that depends on the market. usually when a bank gives someone a short sale allowance, its done in order to avoid the beating they'll take if it hits the market under foreclosure.
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