Does anyone have advice for us? We are interested in buying an empty house that the bank foreclosed on and it was just put on the market last week. We haven’t sold our house yet though. Can we make an offer contingent upon our house selling? I don’t know if the bank would go fo that. Can we make a very low offer that the bank might except that a regular homeowner would find insulting? What is the difference between buying from a owner-seller vs. a bank? Someone mentioned to us that we might be able to trade our current home to the bank for the foreclosed home? Does that sound familiar to anyone, I have never heard of anything like that. Any advice, insight, ideas would be appreciated!
Can you get a look at the place? I’ve heard that some vendors of foreclosed homes do NOT allow inspection of the houses before buying, which would trip all sorts of danger signals in my mind. Can you make your offer contingent on the foreclosed house not being trashed (unless you’re okay with that and are able and planning to repair it, of course)?
Be prepared for it to take a long time. We bought a foreclosed condo a year and a half ago, and it took weeks and weeks for the bank to respond to our offers. It was painfully slow. We seriously lowballed, (I think around 30% off the asking price) and ended up paying a lot less than the previous owner had paid for it about a year previously. Good luck, and be patient.
Also, be prepared for the fact that some people really trash a house before the bank forecloses - sometimes on purpose (graffiti, holes in walls) other times because money is so tight they can’t pay for normal upkeep.
Yes, we originally looked at it when its owners were trying to sell it. Then it went off the makret and I panicked that someone else had bought my “dream home.” I called around and found out it went off the market because it was foreclosed. It took the bank a few months to get it back on the market and now I am trying to figure out how to buy it before someone else does but we have to sell our house first.
We just got an acceptance on our offer to buy a forclosed home. It took a month to get an acceptance. So patience is a virtue.
Have your realtor contact the realtor representing the bank on the foreclosure. Have your realtor draw up an offer contract and submit it to the banks realtor for submission to the bank for approval. This is where the contingency for the sale of your home comes into play- it gets incorporated into the offer.
Things to consider for a contingency offer: How is the market in your area? Is your current home already on the market? What is the average continuous days on the market for homes in your neighborhood? Can you buy the second house without a contingency and rent out your current home until the market stiffens up a bit?
Also, banks usually want a mortgage pre-approval certificate to show that you can get the mortgage.
Oh, another thing, sometimes the bank has a required amount of money the require for an earnest money deposit. Our earnest money deposit was a required $5000. The earnest money amount might be negotiable,this is something to talk to your realtor about.
But, have you seen it since they left?
You want to make sure the owners didn’t walk off with all the copper piping and the appliances.
Wow. This would pretty well guarantee that they’d receive no more than about half of what the house in decent condition would fetch.
Good point Truck! That would definitely be something to check out. We would want a thorough home inspection as part of the contingency in the offer as well. That’s another question that I had: I know the bank will not make any home repairs that the inspector finds, but will they negotiate much on that?
Also, LV, our house has been on the market about a month or so now. It’s kind of an oddball house - very small house on a 1/2 acre in the middle of town. We might be able to rent it out, I haven’t looked into that because my fiance is dead-set against having two mortgages, rented or not. That’s why I got so excited when someone was telling me that I could “trade my house in” to the bank toward that other house. But no one seems to have heard about anything like that.
Also, be prepared to receive lots and lots of collection notices for the former owners. Our house went into foreclosure shortly after the former owners got dragged out in a swat team raid along with a dozen other junkies. It was then bought by a contractor, who purtied up the place before putting in back on the market… which is when we bought it.
It’s been nearly a year since we took ownership and well over 18 months since the foreclosure, but I’d estimate that we still receive 5-10 collection notices a week - returning them as undeliverable hasn’t made a dent, either. Sad fact is, if someone’s been slipping on their mortgage payments, chances are they’ve defaulted on a fair number of other debts.
IME, the bank will offer you an “as is” contract. This contingency will generally be offset by an inspection period, after which you forfeit the right to your deposit. By vigilant during the inspection, as it is true that many people being foreclosed are vindictive, and may damage (or allow to deteriorate) the property.
The idea of trading the house for the one you already have doesn’t make sense. Banks are eager to unload the properties they acquire (usually at a loss to them), so they wouldn’t be inclined to acquire another property in the deal.
Just make sure that the previous owner wasn’t like this lady: Evicted Rant Artist Won’t Budge :eek:
Click on the link for a photo of her car and a bit of the house.
My advice, since you asked: sell your home, rent for a few months if you have to and purchase one of these foreclosures with either a pre-approved loan or cash. A bank probably won’t want to mess with a contingency these days (slow market) and your bargaining position will be much better if you have the funds available to just take the thing off their hands. Don’t worry about insulting them and, IMO, don’t offer them a penny more than the outstanding loan balance.