How to buy a forclosed house?

[DaShi]

Exploiting other people's misfortune.

[Colon™]

Helping other people repay their debts.

[Lancer]

Not paying more than we need to. I've paid a mortgage off, they are easy to get and drain your life effort right out of you so some big $ leech can live fat.

[Zkribbler]

Originally posted by DaShi
Exploiting other people's misfortune.

Exploiting other people's misfortune is the heart and soul of real estate. Buying houses from foreclosures, from divorces, from greedy heirs who don't want mommy and daddy's old house.

[Lancer]

DaShi feels honor bound to pat top $. I'm sure we can find something to sell him.

[DaShi]

It's not me you need to justify your behavior too. . .although it should be.

[Lancer]

I just remembered that I'm carrying the mortgage on a house I sold a while back. I'm the big $ leech!

[Zkribbler]

Originally posted by Lancer

http://realestate.yahoo.com/Foreclosures

This is amazing. Just put in your zip code and forclosing properties pop up cheap...

I found another link HUD

[East Street Trader]

Mortgagees in possession are under a duty to the owner to sell at a proper market price.

There is no inbuilt discount.

Advertising a house as being sold consequent upon re-possession is just a marketing device. Taking advantage of the stray, "get rich quick" notion that came into your head.

What is true is that a mortgagee in possession will price to sell. So in a very slow market, where other owners are hanging on hoping that prices pick up, re-possessed houses are among the few houses put onto the market at realistic prices. So, in those circumstances, they can seem like a bargain.

Some things are sold through courts - ships in England for example. But I have not previously heard of houses being sold in that way. So that may be special to Texas.

[PLATO]

Realtors will have most of the listings of post foreclosed homes. If you have cash or can have prearranged financing, then your cheapest way to pick up a foreclosed house is at the foreclosure sale. The mortgage company will bid what they are owed. Any bid above that is likely to buy the property, but you usually only have 24 hours at the most to settle up. The biggest drawback here is that you usually will not have the right to inspect the property before buying it.

[East Street Trader]

This is on Wikipedia.

http://en.wikipedia.org/wiki/Foreclosure

It's dull stuff and I suspect that, in practice, the various mortgagees and the owner will proceed by processes agreement among themselves rather than by processes laid down by law.

But it certainly does appear that in some if not most US states auctions conducted by a court official are at least theoretically possible.

In all likelihood the price achieved at such an auction would be much the same as the price achieved at an auction organised by the US equivalent of an estate agent. Unless the court official failed to advertise effectively.

Buying land at auction is a tricky business in any circumstances - and the types of auction referred to in the Wikipedia article would be no exception to that. In England you take your lawyer with you to the auction and will have got him to do some preliminary work beforehand. I'd guess it to be the same with these auctions.

[PLATO]

No...not really. The "Power of Sale" that wiki refers to is not exactly correct. The judicial sale almost never happens. There are two basic ways that a mortgagor aquires title to a property.

1.) Deed in leiu of sale - This is where the owner of the house provides the mortgagor with a Quit Claim Deed that relinquishes all rights to the property in favor of the mortgagor. No further action is required by either party (other than filing the document as a matter of public record in the Register of Deeds Office) to effect the transfer of property.

2.) Trustee's sale - Almost all mortgage loans in the US are secured by a "Deed of Trust". This instrument names a trustee who can legally sell the property n the event he/she is provided with evidence of default by the mortgagor. Once this evidence is provided, then there are some different steps involved depending on State law. In general, they all provide for a time period for the property owner to cure the default by paying off the mortgage (eithier by obtaining new financing, selling the property, or with cash) and for the trustee to announce the pending sale in a public communication (usually a newspaper). Once these things are done, then the property is literally "sold on the courthouse steps". The trustee, acting under the authority granted in the Deed of Trust, will accept cash bids for the property. The mortgage holder will bid what they are owed. If there are no further bids than the mortgage company will aquire title from the trustee. If there are other bids, then the mortgage company will probably not bid again as they really have no interest in owning the property and then the highest bidder would aquire title from the trustee.

By far and away, the most common method is the second one. It is very unusual for the mortgagee to allow any type inspection of the property as they are usually not very happy about losing their home. So, it is pretty much "buyer beware" if you buy at a sale of this type.

[DanS]

My sis bought a house on the courthouse steps once, just to see what it was like. She sold it several months later for a small profit.

She lives in a rural area of Ohio and the property was right across the road, so she knew a little bit about it without inspecting the inside of the house.

[PLATO]

Originally posted by DanS
My sis bought a house on the courthouse steps once, just to see what it was like. She sold it several months later for a small profit.

She lives in a rural area of Ohio and the property was right across the road, so she knew a little bit about it without inspecting the inside of the house.

This is actually not that uncommon. A lot of times, neighbors that are able, will buy the property as investment property. The proximity to their own homes gives them some knowledge of the property and some sense of security in owning it due to its proximity.

[DanS]

Or if the house is an eyesore, they'll buy it to bulldoze it.