Your Questions About Foreclosures |

Your Questions About Foreclosures

Your Questions About Foreclosures

Lizzie asks…

What questions should I ask while I’m looking to buy a house?

What questions should I ask realtors while looking at houses? The houses I am looking at are foreclosed homes, short sales, and REO. All replies would be appreciated. I just wanna look out for my best interest… I’m very scared that I might end up getting a bad house and I wanna make sure all my ends are covered… PLEASE HELP!

Your Questions About Foreclosures

The Expert answers:

When you deal with foreclosures, you don’t have the same recourse if there is a flaw in the property. That’s because the Lender never lived in the property, and really doesn’t know the condition. So, you should be sure that you have the following inspections ( make it a part of your written offer, and be sure you can terminate the contract if repairs exceed a certain cost, or that you may terminate for any reason with a full refund, during the inspection period):
Thorough home inspection that includes roof, electrical, plumbing, etc.
Radon test
septic test ( if not hooked up to a sewer)
well water test ( if not hooked up to public water)
termite inspection
Pool inspection ( If there is a built in pool, this is really important, because pools are expensive to maintain and repair).
If the home inspector suspects mold problem, follow thru for a mold test to determine if it black mold or something not serious,
If the inspector suspects asbestos, have that tested, too.
If the house was built before 1978 and you see cracking or flaking paint, test for lead paint exposure ( especially if you have toddlers running around the house. Lead paint tastes sweet, and babies have put chips of paint in their mouths, and swallowed them)/
Be sure your inspection period gives you adequate time to obtain estimates for repairs. If you find the repairs are too costly, or serious in nature, do not hesitate to negotiate with the Lender, and if you can’t get enough of a discount to pay for repairs, be prepared to look for another house!

If the house is empty and has been “winterized” ( this happens with HUD homes a lot) you will have to arrange to have the services put back on, to test them.

Good luck!

Your Questions About Foreclosures

William asks…

Buying A Foreclosed Home?

Alright, well my mom and I are thinking of moving to Palmdale but we can’t exactly afford a full priced home. So what I did was check the listings of foreclosed home. Now it says the loan balance is like 3,000 on average. Now on this page;_ylt=AtW9lg8TWCjWcyS4ExQmn_LnMrQs?cc=realestate&p=Palmdale,%20CA&priceHigh=&priceLow=&nodeId=750007014&radius=&bedrooms=2&bedrooms=3&bedrooms=4&bedrooms=5&bathrooms=2.0&bathrooms=2.5&bathrooms=3.0&bathrooms=3.5&bathrooms=4.0&type=foreclosure&sortBy=price+1
it says the loan balance is $2238 but it also says the amount is $2238. So is that the price or what? Thanks in advance.

Your Questions About Foreclosures

The Expert answers:

No, of course that’s not the price. What you are seeing is the amount of money which the current homeowner is in default on the loan. Assuming that this property is eventually fully foreclosed upon, the bank will offer it for sale at the current market value for the property. What they will accept to sell it may not be market value, but it will be FAR more than $2238.

Your Questions About Foreclosures

Richard asks…

Foreclosed home in Detroit (aka the Home of Slim Shady, the New Darfur, Kwameville) on sale for $1? ?

Foreclosure fallout: Houses go for a $1
Ron French / The Detroit News
DETROIT — One dollar can get you a large soda at McDonald’s, a used VHS movie at 7-Eleven or a house in Detroit.

The fact that a home on the city’s east side was listed for $1 recently shows how depressed the real estate market has become in one of America’s poorest big cities.

And it still took 19 days to find a buyer.

The sale price of the home may be an anomaly, but illustrates both the depths of the foreclosure crisis in Detroit and the rapid scuttling of vacant homes in some of the city’s impoverished neighborhoods.

The home, at 8111 Traverse Street, a few blocks from Detroit City Airport, was the nicest house on the block when it sold for $65,000 in November 2006, said neighbor Carl Upshaw. But the home was foreclosed last summer, and it wasn’t long until “the vultures closed in,” Upshaw said. “The siding was the first to go. Then they took the fence. Then they broke in and took everything else.”

The company hired to manage the home and sell it, the Bearing Group, boarded up the home only to find the boards stolen and used to board up another abandoned home nearby.

Scrappers tore out the copper plumbing, the furnace and the light fixtures, taking everything of value, including the kitchen sink.

“It about doesn’t make sense to put the family out,” Upshaw said. “Once people are gone, you’re gonna lose the house in this neighborhood.”

Tuesday, the home was wide open. Doors leading into the kitchen and the basement were missing, and the front windows had been smashed. Weeds grew chest-high, and charred remains marked a spot where the garage recently burned.

Put on the market in January for $1,100, the house had no lookers other than the squatters who sometimes stayed there at night. Facing $4,000 in back taxes and a large unpaid water bill, the bank that owned the property lowered the price to $1.

$1 sale to cost bank $10,000
While it’s not unusual for $1 to be exchanged when property is transferred for legal reasons, listing a home in the Multiple Listing Service for $1 was surprising and unsettling to Kent Colpaert, the listing real estate agent for the property.

“I’ve never seen a home listed for $1,” Colpaert said.

“But it’s been hit hard: It’s just a shell.”

On Tuesday, listed one other single-family home, one duplex and one empty lot at $1 in Detroit.

Dollar property sales are the financial hangover from the foreclosure crisis, said Anthony Viola of Realty Corp. of America in Cleveland.

Lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.

“No one has much sympathy for these banks that made subprime loans,” Viola said. “And in some cities like Cleveland, judges aren’t letting them sit on the properties — they’re ordering them to tear them down or sell them.”

So desperate was the bank owner of 8111 Traverse Street to unload the property that it agreed to pay $2,500 in sales commission and another $1,000 bonus for closing the $1 sale; the bank also will pay $500 of the buyer’s closing costs. Throw in back taxes and a water bill, and unloading the house will cost the bank about $10,000.

“It doesn’t make sense in some neighborhoods to keep paying costs and costs,” Colpaert said. “It can make more financial sense to give it away.”

Buyer calls it an investment
Colpaert declined to provide the name of the prospective purchaser, because the deal had not been through closing. The agent did say that the buyer agreed to pay the full list price of $1, and planned to pay cash.

The buyer, a local woman, considers the home to be an investment property and will not live there, Colpaert said, though exactly how soon the buyer can expect to recoup her four-quarter investment is questionable. Replacing the guts of the house will costs tens of thousands of dollars, and the owner will have trouble keeping scrappers from stealing the improvements as quickly as they’re installed. Home demolition costs about $5,000, Colpaert said.

Meanwhile, the new owner will owe $3,900 in property taxes in 2009 on her dollar purchase unless she challenges the tax assessment.

While selling a home for the amount of change most people could find between their couch cushions is unusual, some abandoned homes in Detroit sell for $100; vacant lots can be purchased for $300.

“My 14-year-old son could buy a block of Detroit property,” said Ann Laciura, senior servicing specialist for the Bearing Group.…

How shameful is this? This house got sold in 2006 for under $70,000, yet the buyers still couldn’t afford mortgage so it got foreclosed. After the bank took back the property, the house was in such bad shape that it got boarded up and no one even stepped foot into the property. Deciding that it was such a big liability, the bank decided to sell it for $1.

Detroit is in such a bad shape it’s funny. What do you think we could ever do to rebuild this city?

Your Questions About Foreclosures

The Expert answers:

Selling a home in Detroit for $1 is nothing new
the house that my Dad was born in (1928)
large, wood burning fireplace, 3 bedrooms
was sold in the mid 80’s for $1( the HUD rule was it needed to be up to code within 1 year since it was in shambles)
it wasnt brought up to code after the $1 purchase it was bulldozed

Your Questions About Foreclosures

Nancy asks…

can i rent foreclosed homes 1 I want is foreclosed already?

Its foreclosed already 4/3mwith pool price is 250,000 for sale or selling price owner will g 4000 for closing

Your Questions About Foreclosures

The Expert answers:

Most banks do not want to be landlords so they won’t rent them out

Your Questions About Foreclosures

Steven asks…

Freddie mac foreclose home for sale?

Ok I saw a foreclose home in illinois for 17,900 I offer 14,000 because the house need 2 be fix 100% the seller counter my offer for 17,000 the house only been on the market for 10 days I really want it they didn’t respond back to the 15,000 what can happen next….
Ok I sent an offer for 15,000 yesterday no respond back yet my agent said give it 2 Friday for a respond

Your Questions About Foreclosures

The Expert answers:

They can:
1) Accept
2) Decline
3) Counter
4) Ignore

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Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures
Your Questions About Foreclosures

Your Questions About Foreclosures

Your Questions About Foreclosures