Upcoming Foreclosures

buying bank foreclosure homes?

are there any advantages or disadvantages in buying government tax foreclosure homes or owned by the bank??

Public Comments

1. Not really. Most homes sell for close to fair market value and distressed homes tend to be in distressed condition for what should be obvious reasons. When you buy a foreclosure you generally must waive the usual seller's disclosures as the lender has no idea of the true condition of the home. In most jurisdictions you don't buy a home at a tax sale, but the right to collect the unpaid taxes plus interest at a statutory rate. The owner can redeem the property by paying you the balance due plus any interest and fees within the redemption period, typically 6 months to 2 years. If the owner doesn't pay you must start foreclosure proceedings yourself and then have them evicted from the property.
2. Stop watching late night infomercials. There are plenty of foreclosures out there. But really very few "government tax foreclosure homes." That means homes that have gone into foreclosure because the taxes haven't been paid. In 99% of the cases, the lender forecloses ("bank foreclosure") before the government. Advantages: Sometimes good bargains. Disadvantages: You're buying the house in as-is condition, and sometimes the condition really is pretty bad. (Lots of people who lose their homes to foreclosures trash the homes before moving out. And if they don't, after a house sits vacant for 3-6 months, you can end up with all sorts of problems.) Also, the process is uncertain. Some banks are pretty good about responding quickly to offers. Others aren't. And some will collect multiple offers, then sell to one...leaving the others out in the cold. So: Give it a try, if you want. But work through a Realtor. Don't spend your money on the infomercial programs. Hope that helps.
3. i agree with both of the posters. thing is, those commercials make it sound really easy to get into this market. it's anything but. anything can happen any time that you buy a home. there are many additional wrinkles when you buy REOs or tax foreclosed homes. 1. you are buying as-is. this means that you are welcome to have a home inspection performed, and in fact i would recommend it. it will keep you from purchasing a lemon. however, the bank will not be repairing anything and will simply say "if you don't like it, walk". 2. many of these homes are in horrible conditions (either because of vacancy, the previous owners intentionally trashed it, squatters, or lack of maintenance). that bargain isn't a bargain when you have to shell out twice what you paid to get the home fixed up to code. if it's distressed, and you don't have connections to get repairs fixed at cost, i would forget about it. 3. many of these homes are in horrible areas. do you want to live in the middle of gunshot alley? now, a lot of people say to this "i don't care, i will rent the place out". well, that's gonna be a problem as well because few want to pay top dollar to rent in a war zone, and those that do are often not the most responsible individuals. Note**that is not to say that everyone that lives in these areas is like this, but the odds are much higher that they will be. most importantly, if you are going to do this, you need a good lawyer and a good real estate agent. dealing with foreclosure sales are not for the uninformed or for rookies. they can get very complicated, and you need to have a pro that makes sure that all Is are dotted and Ts are crossed. if not, you could regret getting into this market.
4. Bank Foreclosures Safe simple and advantageous as good as buyng a resale or new home But depends on the condition of the home. If you like it and can fix things go for it. You will also get loans to buy them. Bank owned are sold between 30-70% of fairmarket values. Bank owned will not generally have liens or tax or utilitiy dues (pro-rated). Govt. Tax forclosures, in General are in bad shape, owe taxes and utility dues, door taken off, wall removed etc. and the city/municipal council will not assist in any restoration. You may not win a loan (no not even 203K) becuase, the tax dues will apear in the title search which will have liens and loan will not be sacntioned. Also, many times you have to pay full cash at closing. Many tax foreclosed will have un-authorised occupants and eviction will be your problem...... Rare cases, old person who owned the home is dead, and if you believe in ghost etc, another problem.... If it is REO/Bank owned go for it..