anyone have any experience with that? it seems you can get a better deal but I've got no idea how it works.

Works the same as any other sale around here except you're dealing with HUD or a bank instead of an individual seller.

House I'm in now was a HUD foreclosure that I bought in 2012.

It works differently in each state, somewhat, if you are talking about bidding at the auction.

Buying from the foreclosure sale buyer, the bank etc., is not much different than buying from any other seller, except banks are probably less flexible.

Buying at the auction is best left to pros. You have no opportunity to inspect, and possession may be a problem. It is also usually all cash, no easy payments. There all sorts of fascinating problems you can get into.

quote:

. There all sorts of fascinating problems you can get into.

Yes, I have heard. You could probably make a career out of dealing with those fascinating problems.
I am content to deal with the fascinating problems specific to my chosen profession.

I bought a HUD foreclosure house in Denver. I set up a contingency mortgage with a lender, up approval of the property, etc. At the time there were nearly 3000 HUD foreclosures. I put 500 bucks in an escrow account, went and looked at houses (they allowed tours of the houses), bid on several WAY under what they should have sold at, and scored a nice little 3 bedroom in Lakewood very cheaply. I dropped about 10k in repairs and improvements and sold it 2 years later for a nice profit.

We bought our current house from the bank in 2009. In our case, due to the market conditions at the time, it did not appraise for the offer amount. I'd make sure any offer is contingent on the appraisal. In our case we then went back to the selling bank and said we are only interested at the appraised value. They agreed to the reduced price.
Keep in mind you are likely buying a house that has sat empty. It's hard on houses to sit empty. Seems to accelerate crap going bad.

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Originally posted by Powers77:
Keep in mind you are likely buying a house that has sat empty. It's hard on houses to sit empty. Seems to accelerate crap going bad.

In addition, it's not uncommon for residents who have been foreclosed on to trash the house or even strip it of everything - even including the wiring, pipes, lighting fixtures, doors, and countertops.

Running into that is more of a risk if buying sight unseen at auction, but be sure you inspect it thoroughly nonetheless.

It works like a normal real estate transaction. Ours was on the market, our realtor put our offer in, the bank countered telling us someone else had an offer in and for both partys to come back with our best offers. Our offer must have been better as we won the bid.

Now, inspections were tricky because it could not be inspected unless we were under contract and if anything was found after we were under contract and backed out, we lost money. Luckily, we have relatives that are general contractors and gave us the all clear before we went under contract.

Ours as most are as is. The bank will not repair anything and will not be liable for any issues that come up during inspections or after closing. Depending on how long the house was vacant, be prepared for broken pipes, and to replace the water heater, furnace, and any other appliance.

After the bid was accepted, the bank and title company had numerous papers that were sent and needed to be returned in 24 hours, most through email. We used the banks title company as it was free, though they were not the greatest and you may want to pay the extra money to use your own. One example was that they lost the checks after closing, thus we needed to have new checks sent and the old checks cancelled. They reimbursed us the fees of all of this but was a huge PITA.

This was our experience and hopefully not the norm of how they all go. Good luck!

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Ours was on the market, our realtor put our offer in, the bank countered telling us someone else had an offer in and for both partys to come back with our best offers. Our offer must have been better as we won the bid.

Or there was no other offer and they milked you for more money.

I won't play those games. I was looking at a house to rehab last year that was bank owned. They had it listed for a price, and I offered them full price, no contingencies, cash sale. They spoke of "other offers" which told me they weren't really interested in selling it....to me at least.

Both my house and my neighbors were built in 2005, and foreclosed in 2010. Mine was put up for sale at the beginning of 2012, and theirs 2015. I got mine for roughly half of what the original owner had invested, and the neighbors for about 20%. I didn't have to put much work into mine, and so far they are into theirs for an additional low six figures.

If you're working with HUD you'll want to be aware of how they do things. It's slightly different than the others. Hoops. Things they won't do that regular sellers would. How and when they accept bids and from who and how they determine what amount they'll accept.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by Powers77:
Keep in mind you are likely buying a house that has sat empty. It's hard on houses to sit empty. Seems to accelerate crap going bad.

In addition, it's not uncommon for residents who have been foreclosed on to trash the house or even strip it of everything - even including the wiring, pipes, lighting fixtures, doors, and countertops.

Running into that is more of a risk if buying sight unseen at auction, but be sure you inspect it thoroughly nonetheless.

We looked at over 100 houses in our move here in 2009. More than 90 of them Foreclosures or Short Sales. (All that was on the market). You wouldn't believe some of the stuff we saw. People are freaking animals. I came away from it believing that there is a strong correlation between how one takes care of their home and job performance and financial success. 90+ homes where they were living in squalor. These were $500,000 homes at the peak that we are talking about. Yeah, I bet you had the same attention to detail doing your job. I'm stunned that you would be one they let go.

I bought my current house in 2013, and it was a bank owned foreclosure. I also bought a short sale property in 2009. Works pretty much like a normal sale but certain aspects of the closing are slightly different.....they might insist on using their title company.....or this lawyer etc..... Not to say you can't also pay for your own to check everything.

The houses. Generally they have had no maintenance for the past 3-5 years (or more). A lot of times something major went wrong with the house.....like a roof leak and it needing a new roof they couldn't afford...and that's when the people said screw it and stopped paying........well by the time it got foreclosed and the bank got it for sale could be years later..........I've seen 2" of standing water in the master bedroom and the entire ceiling covered in black mold.......

Most houses are in pretty decent shape, plan on fixing some stuff.....I would make sure I could go inside the house before I even bid on it......Back when I bought mine, they'd take mortgage offers.......but the banks ALWAYS took the cash offer and made a deal with the cash buyer. It might be different now.

quote:

Originally posted by a1abdj:

quote:

Ours was on the market, our realtor put our offer in, the bank countered telling us someone else had an offer in and for both partys to come back with our best offers. Our offer must have been better as we won the bid.

Or there was no other offer and they milked you for more money.

I won't play those games.

When you need to move and it is a lot of house for the money that is in your price range...you don't mess around and have it sold out from underneath you.

quote:

Originally posted by RogueJSK:

quote:

Originally posted by Powers77:
Keep in mind you are likely buying a house that has sat empty. It's hard on houses to sit empty. Seems to accelerate crap going bad.

In addition, it's not uncommon for residents who have been foreclosed on to trash the house or even strip it of everything - even including the wiring, pipes, lighting fixtures, doors, and countertops.

Running into that is more of a risk if buying sight unseen at auction, but be sure you inspect it thoroughly nonetheless.

There was a news item several years ago in the Phoenix area about a guy facing forclosure who poured cement in the house toilet drainage before he left.

The bank that owned the house went after the jerk. Don't know if they got any money from him.

pretty common around here. ^^^^^

They are a great way to make bank approved contractors wealthy, unless you are paying cash. Work needed to make most of them financable gobble up your equity. Perhaps it's different in slower markets.