Upcoming Foreclosures

Why are some foreclosures listed at such low values when they clearly couldn't possibly be that price?

I have been doing research on buying a foreclosure and I understand about preforeclosure, auctions and bank owned REO properties, but what I cannot understand is when I go to a website such as Realtytrac.com and do a random search in my area and find most 3 or 4 bedroom homes in the 250,000 to 350,000 range, but then there are a few listed at around the 3200 or 8600 or 26000ish range. I know that there is no possible way that these homes cost this much, so why are the amounts being listed as such?

Public Comments

1. hmmm, that sounds strange. I search my area all the time and have never seen prices that low. Are you sure they are not for renting? You said foreclosures, but they may be rentals that are just mixed up in there. If not, then it is definitely innacurate. Why that is I have no idea.
2. Many companies use deceptive practices to draw people into their data-base.remember the old saying--sounds too good to be true-it isn't.Banks have minimums they will accept-and even in auction situations--they have someone bidding on their be-half--so the property is retained if their minimum isn't met.
3. Realtytrac does not sell houses. They sell lists. The lists are of homes that have received (or might soon) a letter of foreclosure. That could be from a lender, taxes or home owners association. If an owner is behind on their HOA dues, the HOA could file a letter of foreclosure for the $800 owed. That means that at the courthouse steps, you could start bidding on the house for the $800 - for the rights the HOA has to the property - and inherit any other liens (like the upside down mortgage) To buy a house for $3,200 you have to go to Detroit. In Detroit, values will continue to drop for the next ten years, so expect to hold it, paying the property taxes and evicting the drug dealers for a while. Then, in 2022 you can sell it for about $15,000.
4. If there is a 2nd mortgage for $10,000 on the house, the amount you need to pay at the foreclosure auction is $10,000 cash. Then you get the deed. You are the owner. The problem is that the new owner must make payments to the 1st lender or the house will be foreclosed again. Some 2nd lenders might be willing to accept $2,000 cash for their interest in the property. They just want to get something.