Questions about buying a specific home and foreclosures?
Question:
Let's say this were to happen. From now until then, what would be the best way to save the money quickly to put a downpayment on the home? I started thinking about buying a foreclosed home in the area in a year from now, but I don't know anything about foreclosures. All I know about real estate is that if you buy a home and eventually sell it, you will most likely profit from the sale.
Could someone advise me about foreclosures (in layman's terms, since I don't know real estate lingo)? And has anyone ever heard of an actual case where this actually happens (my scenario that is)?
I know this is a crazy pipe dream, but I feel like this home needs to belong to a family member, maybe me
Answer:
Here is some information on foreclosures each your state...http://foreclosures.uslandlord.com/...
A foreclosure is when the people buying the home cant make the payments on it, and the bank takes it from them. The bank then sells the home, usually at a low price so it sells quickly.
Buying a foreclosed home is no different than buying any other home, but you will buy it from a bank instead of another person. You will still deal with real estate agents, mortgage companies, etc.
Buying a home is a very good investment, and a good way to save money. The property taxes and interest you pay is tax deductable, and most homes will gain value over time.
I am in the same kind of situation in that I am just waiting for my dad's family property to come onto the market. I too couldn't afford the asking price at the time but am financially able to do so now. The present owners are aware that I am wanting to buy since I have put in several purchase offers and have asked for the right of first refusal at such time as they are willing to sell.
You could actually do the same. Let the new homeowners know that you would appreciate that option.
As far as foreclosures are concerned, while the "foreclosure" is the same in all situations (the property was returned to a lender either voluntarily or by judicial means) the when, where and how to acquire them can be different and unique to the various banks, government agencies, etc.
HUD, FHA, VA and the various other government organizations that "insure" mortgages all offer properties for sale. These are properties that the lender after being paid off, return to the government for "long term" disposal and maintenance. They are generally in the worse shape or at least in less desireable shape for the lender to maintain and market. Those kinds of property are generally marketed pretty quick to investors that are in the know. Not that some of the properties that come up for sale on the open foreclosure market aren't valuable but you have to do your due dilegence. Check out www.firstgov.gov and follow the links. It is fairly easy to research. Some agencies require that you bid through a real estate agent. Those agents have to register before hand. Not all are. Some auctions allow you to bid direct, online, in person or by sealed bid.
In 1989, I bought my first house a 3bd, 2.5 bath single family residence at a HUD auction. You were required to bid through an agent. The little old man that I found suggested that I bid above the HUD asking price since everyone else would probably bid below. I won by $500. The bid was $30,000. I spent about $20,000 over a 12 year period fixing it up. I sold it in 2001 for $125,000.
I bought that with absolutely no money of my own. I borrowed the $10k down payment from a relative to get the mortgage. After a year, I refinanced the property at $50K, paid off my relative, the first mortgage and some other bills. Did the remaining renovations and was still paying less than $300 a month. Not to mention the tax deductions, etc. You can't rent a dog house for that much let alone a 3 bedroom house.
There are many first time home owner loans that require little or no money down. For an FHA loan, you can get in for about 3% down.
I am a real estate agent and loan broker if you have anymore questions, email me.
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