Buying a Foreclosed Home

[lncoop]

How do y'all feel about buying a foreclosed home for your primary residence? I'm not talking about something that's been trashed and must be bought cheap with the expectation that major renovation will be required, and I'm not talking about something to flip. Practical implications (hidden issues due to abuse/neglect, etc.) notwithstanding I'm not sure I could live in a home that was taken away from a family. Thoughts?

 

[metriccrescentwrench]

Re: Buying a Foreclosed Home

....I'm not sure I could live in a home that was taken away from a family......

Well, I'm glad to hear there's at least one person in the world with a conscience.

My step-son bought a foreclosed house which he's repairing in preparation for renting it out. It was in terrible shape as the people who lost it were meth dealers, he's had neighbors come over and thank him for cleaning it up. Once he got into the project he found that it basically needed to be gutted and then treated just like new construction.

I don't know how much all that applies to your situation (I'm assuming you brought this up because there's at least the possibility of you getting a foreclosed house) as there are obviously many reasons people loose their homes, not all of which they have much control over. At least banking laws have changed so that it's not so easy for banks to write loans to people who won't be able to afford payments, and the employment picture is improving so fewer people will be losing their home due to a job loss.

 

[aspeck]

Re: Buying a Foreclosed Home

Been on both sides of the issue with people. It is tough for people to lose their home, sometimes it is their own fault, and sometimes it is no fault of their own and they try like anything to keep it afloat. The bottom line is, they do not have the home any more and so buying one that has been foreclosed on is no fault of the buyer. However, the buyer does need to do their due diligence. Hire and inspector to check EVERYTHING out. Many times there can be neglect because of finances, and sometimes down right sabotage. However, a good home and a good deal can be found.

One person that I have dealt with that lost a home was glad to see it bought by a family that loved and appreciated it instead of someone who just tried to flip it.

There are many different ways to look at it, you have to decide what you are comfortable with and if the home is solid and the price is right, it is up to you whether you pull the trigger or not. No right or wrong answer ... just an answer that best sits you and your family ...

 

[agallant80]

Re: Buying a Foreclosed Home

I would just get it inspected very well. Any home is going to have issues weather foreclosed or not. My wife's house has never been touched in 11 years and she is a good person, the house is not foreclosed on it was just owned by a woman who knew nothing and had not desire for home maintenance. We are renting it out now and I feel that it has the potential to be a bit of a ticking time bomb considering she has done no upkeep to it (she bought it new). Point being is any house foreclosed or not can/will have some issue.

 

[kfa4303]

Re: Buying a Foreclosed Home

Nothing inherently wrong with it. After all, one mane gathers what another man spills and having a vacant house on the block doesn't help anybody. As long as it passes a very thorough inspection, I say go for it. However, if it's like most foreclosure sales, you need to have all of the money up front and liquid. No mortgages, loans or other form of credit. Cash money only. Tax liens are also a great way to get foreclosures cheap if you're into flipping.

 

[bruceb58]

Re: Buying a Foreclosed Home

The person that took out the loan did not live up to the obligations that he/she signed up for.

I held the note on the property, one small house and the land, where I built the house I live in now. Took me 6 months to get the people out because they tried every trick in the book to stay like filing bankruptcy.

I still remember when the woman who cleans my house told me how she and her aunt had just purchased a house for $400K back during the loan debacle. Turns out she bought on stated income and the loan was a teaser ARM. I was not surprised that one year later she was foreclosed on. There were many of those loans and some people just didn't understand how ARMs worked.

 

[WIMUSKY]

Re: Buying a Foreclosed Home

Practical implications (hidden issues due to abuse/neglect, etc.) notwithstanding I'm not sure I could live in a home that was taken away from a family. Thoughts?

If it's not you it will be someone else. Once it's foreclosed on it's not the previous owners home. You're buying it from the lending institution. Someone needs to buy it so it's not a blight in the community. It's an unfortunate situation, but it is what it is.....

As Art said, "buying one that has been foreclosed on is no fault of the buyer".

 

[tazrig]

Re: Buying a Foreclosed Home

I wouldn't have any problem living there. The former owners have long since moved on. If you don't buy it someone else will. It's not like you're putting a frail elderly widow out on the street.

 

[Scott Danforth]

Re: Buying a Foreclosed Home

my home was a foreclosure. prior family had 4 properties and they walked away from it

 

[Jeep Man]

Re: Buying a Foreclosed Home

The person that took out the loan did not live up to the obligations that he/she signed up for.

I held the note on the property, one small house and the land, where I built the house I live in now. Took me 6 months to get the people out because they tried every trick in the book to stay like filing bankruptcy.

I still remember when the woman who cleans my house told me how she and her aunt had just purchased a house for $400K back during the loan debacle. Turns out she bought on stated income and the loan was a teaser ARM. I was not surprised that one year later she was foreclosed on. There were many of those loans and some people just didn't understand how ARMs worked.

Enlighten me Bruce. As I'm in Canada and our banking laws prevented the loan debacle here, I am not familiar with a "teaser ARM".

 

[bruceb58]

Re: Buying a Foreclosed Home

Enlighten me Bruce. As I'm in Canada and our banking laws prevented the loan debacle here, I am not familiar with a "teaser ARM".

Teaser Rate Definition | Investopedia

There is nothing necessarily wrong with it except for people that somehow think that rate is going to last forever. Unfortunately, many unethical loan people were pushing uneducated unqualified people into these.

The loan people knew they could sell these bad loans so they wouldn't be stuck with them.

 

[Tim Frank]

Re: Buying a Foreclosed Home

How do y'all feel about buying a foreclosed home for your primary residence? I'm not talking about something that's been trashed and must be bought cheap with the expectation that major renovation will be required, and I'm not talking about something to flip. Practical implications (hidden issues due to abuse/neglect, etc.) notwithstanding I'm not sure I could live in a home that was taken away from a family. Thoughts?

It doesn't matter what any of us think.
The fact that you asked.....
I don't think I could do it....that's just me.

Nothing illegal or immoral about it....I just think it would reduce my enjoyment of the property.

 

[nwcove]

Re: Buying a Foreclosed Home

.....would it be any different than buying a re-po'd mini van?

 

[bruceb58]

Re: Buying a Foreclosed Home

Many foreclosures are due to people being underwater and bailing on the loan. Would that make a difference?

 

[Tim Frank]

Re: Buying a Foreclosed Home

.....would it be any different than buying a re-po'd mini van?

On the face of it, not really. For every buyer there is a seller.
OP seems to have some reluctance, I understand why, and would feel the same way.

 

[Tim Frank]

Re: Buying a Foreclosed Home

Many foreclosures are due to people being underwater and bailing on the loan. Would that make a difference?

Not to me.

Hope this thread doesn't become an "it's wrong/it's right" argument.
OP just asked what we think.

 

[kfa4303]

Re: Buying a Foreclosed Home

I used to work in banking (commercial/residential lending) during the boondoggle and you don't even want to know the shady gimmicks they came up with to try to drum up business. They make the mafia blush. Of course, there's always someone on the other end to take the bait, so round and round it goes........All I can say is read the fine print........twice!

 

[roscoe]

Re: Buying a Foreclosed Home

It doesn't matter what any of us think.
The fact that you asked.....
I don't think I could do it....that's just me.

Nothing illegal or immoral about it....I just think it would reduce my enjoyment of the property.

SO, I buy the foreclosure, fix it up, and sell it to you a year latter.
You would have no idea it was ever a foreclosure property.
Would you somehow not enjoy the property??

 

[LippCJ7]

Re: Buying a Foreclosed Home

I lost my home last year bud for me I am happy someone got it and is happy in it, if it was a flip house I think it would be different, but knowing a young family is happy means everything to me, I raised my kids there and once the got older and moved on it simply was more then I needed and the economy at the time wouldn't let me sell it and make a profit off of it things were just to close so I had no issues letting it go.

For me I would be happy that it went to a good owner.

 

[Bayou Dave]

Re: Buying a Foreclosed Home

I bought a foreclosure 2 1/2 yrs ago. The price was fantastic and didn't need a lot of work. I had a great inspector that checked everwhere. He even walked the roof line checking all the shingles and crawled all under the house. I am a pretty good handy man and have spent about 10k in repairs, mainly cosmetics. Now, 2 1/2 yrs later the house I paid 85k for is worth 165k. At first I was feeling a little sorry for the PO, but later learned that they had already bought another house in the next town.