Upcoming Foreclosures

help with understanding bank owned foreclosures?

If a bank owns a house that is worth 200,000 lets say. And lets also say that all that is owed on the house is 100,000. As a buyer, if I put in a bid of 115,000(to cover closing costs) is the bank going to accept this offer. I heard a rumor that all the bank wants to do is collect the money owed on the house and whatever they recieve after that, they give to the original owners. Is this true? Help clarify some of this for me. I am in the state of Texas if that makes a difference. Thanks. Ya but lets say that whatever I am offering is covering all of the banks cost, if this is so, then what's to say that the bank won't sell me the house with a low-ball price?

Public Comments

1. Depends on the state. Generally speaking it is kind of true,If there is an overage, but they don't just want he money that is owed on the house if they can they would like all of their out of pocket expenses as well. If the sell the house short then the former owner is responsible to pay the remainder of the debt. Hope that helped
2. If the mortgage balance was $100,000, it's possible there's another $10,000 in attorney fees, and an additional $10,000 in accrued interest. I don't know the redemption period in Texas, but in many states, you can squat in your house for a year before getting kicked out, all the while interest is accruing. So it's never quite that simple. And beware of any additional liens, foreclosures sometimes have them. And yes, in most cases, after the bank has gotten every single penny of their own money back, they have to give the rest to the prior owner. So they might very well not care how much that is, but they do work within a framework of attempting to get the maximum value for their homes, based on their estimates of what the homes true value is. And they also have to weigh their risks of having another 2 months go by before they get another qualified offer, while their carrying costs and attorney review fees etc... keep rising. So they're always looking to take the first fair and reasonable qualified offer that they can get.
3. If you go to auction and there are a lot of bidders - the selling price may very well be close to $200K or even more than $200K. If dealing with a real estate agent, you're more than welcome to put in a bid of $115K but someone else will come along and bid $150K just to split the difference between its worth and the outstanding mortgage. If the property appears to be run-down and people are staying away, then $115K might just do it. Foreclosures operate pretty much the same way nationwide. Some states may have more protections for those in foreclosure than others.