Foreclosure homes are cheap at they said???
Jun.09, 2010 in
Foreclosure Lists
Hi, I was looking at yahoo for some houses in my state, so I found some information about REO homes, but for example, there are many prices, are prices listed there from $3,000 to 3,000,000 so, cause I don’t know how this works, I wonder if a REO home said that the price is $5,000, that is the real sale price?? that is the only price that I need to pay for the house??? or there is the basic price or what??? Do I need to pay something else (besides insurance and taxes????) I ‘m very confused.
Thanks.
June 9th, 2010 at 3:59 am
You might want to read a little bit from the following websites:
http://hutloan.com
http://beginrealestateinvesting.com
June 9th, 2010 at 4:43 am
First of all if you are looking at HUD homes (foreclosed FHA homes) you can only buy them threw a Realtor. HUD does not sell homes directly to the public.
Now for a little education on Foreclosures. Before they go for sale on the open market they have to be sold at a local Sheriff sale. This is the process the mortgage company takes possession of the home for non payment. The really good deals usually don’t make it past the sheriff sales. Remember, just because something is really cheep does not mean it is a good deal. Location, Location, Location makes a good deal if the price is right.
I can make this really easy for you. Get yourself a Realtor that you are comfortable with and stick with them. They are educated, licensed and insured to assist you and they are absolutely free to you. A good Realtor can answer or get the answer to any of your questions. Just remember not to get on realtors black list by jumping from one to the other. They only get paid when you go to a closing and the word gets out when you work with more than one realtor at a time.
If you would like a referral free of charge to a good Realtor in your area please feel free to contact me.
You could also go to Realtor.com and take your chances of finding one on your own.
Good luck,
June 9th, 2010 at 5:25 am
A foreclosure means someone is owed money. All the people want is their money. However, under the Uniform Commercial Code all businesses must attempt to mitigate damages.
Here is how it works. You buy a house for $200,000 and put $50,000 down. The bank holds a lein for $150,000. Now for one reason or other, you do not pay your taxes of $2500 per year and the county puts a lein on your home for that amount. You also miss a bunch of payments and the bank forecloses and you lose the home.
Now the bank only wants its $150,000 plus interest. it knows it can sell the house easily for that amount but it can’t. It has to mitigate damages to both you and the county. So it does its best to get a decent price for the house. After three months it sells for $190,000. The bank gets its money plus interest for the three months plus expenses. Lets say that totals $160,000. Now the county gets its tax money, plus interest and expenses. So lets say that is $3000. So now what is left is $27,000 and that is what you get back. You are the one who loses the money because you are the one who caused the problems.
If it was the county that forced the sale, the same rules would apply. It gets its money. The bank gets its money. You get whatever is left.
If there was a sudden deflation in home prices and they ended up selling it for less than what was owed, you would still owe that amount of money.
Now, for those ads about the super cheap homes. Those are called teasers. Yes, they might actually have a house for $5000. It is probably unsafe and you will have to tear it down.
First they show you the crap, then they move you up to a better home at a lot more money. (This tactic is called “bait and switch.”)
If these homes were really worth something, you would have some giant business in there buying them up as fast as they can. The cheap ones are junkers and the real ones have realistic prices.