purchasing a foreclosed home

so we are looking to purchase a foreclosed home. We will be putting 20% down and have our closing costs already set aside. We feel this may help us buy in a nicer neighborhood without going above our budget. We would like to purchase about 15% below approval price just in case god forbid we become a 1 income household.
Anyway, I am looking for advice and am open to hearing the good, bad and ugly! I just need honest thoughts and opinions! Does anyone have experience with this?

Thanks all!

purchasing a foreclosed home

The only thing I know about foreclosed homes is that they are usually trashed, they are very distressed properties that need lots of work, usually complete renos.

Definitely talk to a realtor and see what they say!

Re: purchasing a foreclosed home

I know very little about buying foreclosures. But get your own inspector. There is one across the street from me and it's been vacant for over a year. There is grass growing inside and the door couldn't be opened because the floor is warped. Someone broke in and turned on all the taps and flooded the basement. I am sure there are lots of stories like that so be careful and good luck.

Re: purchasing a foreclosed home

there are very FEW foreclosed homes for sale on long island

even less in "the nicer" areas

they generally require all cash or a rehab loan - not a conventional mortgage

they are generally not livable and I do not recommend them to first time buyers

you aren't necessarily going to get a better deal - they bank sells the homes for fair market value -

a short sale would be similar- but they are usually more livable - but they can take 6 to 9 months to get bank approval

I have lots of experience in both distressed and regular sales- just about everyone that has called me to buy a distressed sale has bought a regular sale- I think they are usually better deals for the buyer

the short sale benefits the seller more then the buyer

Re: purchasing a foreclosed home

also just as a side note- sites like Zillow are advertising properties as "pre-forclosures"

those homes are not for sale and might never be- so I wouldn't get your heart set on one of those

Re: purchasing a foreclosed home

I completely agree with Beth.

For the typical buyer looking to purchase a primary residence, bank owned homes and short sakes are not the way to go. I always cover this at my initial consultation with clients, and once they understand how these sales work and the potential risks and downsides, my buyer clients always agree these distressed properties aren't worth pursuing.

purchasing a foreclosed home

For us- we are ok with the process taking up to a year. We have a large amount of cash (roughly 40k) set in an account for a home repairs (for any home we buy- we really like making things our own). My father is also a contractor. I'm not sure if this would change things. But I definitely thank everyone for their opinions they are very helpful. The house we were looking at was an REO up for sale in Bohemia.

Re: purchasing a foreclosed home

it's not a matter of having money for the repairs- it's that the house can't get a traditional mortgage so you have to have all cash or a rehab loan

and REO doesn't take a year- a short sale could

Re: purchasing a foreclosed home

The problem is with foreclosures, if it's a "deal" the investors are coming in with cash and you have no chance.

If the investors aren't touching it, it's likely not as much of a deal as you think when you factor in the work and money required to fix it up.

And as Beth says, you can't get a conventional mortgage with these if they need serious repair, you have to go with a rehab loan.