How much money do I have to have to buy a home in foreclosure?
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Having bought several properties, owners, banks usually are eager and willing to talk when presented with a cash offer.even far below what is asked on forclosure..
UHHHH Jon.this isn't a forum for personal solicitations..give it a rest!
Sometimes the mortgage is assumable... so you pay their late fees, and bank fees in some cases, house sale lawyer fees, don't forget to have the house professionally inspected. Generally a house purchase on a foreclosure is a good deal, especially if you have the ability and/or drive to flip it!
make a bid
If the property is in foreclosure but is still being offered for sale by the owner you have your realtor write an offer and the sale is handled in the usual way. If the property has been foreclosed on and you are dealing with the court then usually cash is required with your bid. The rules vary from State to State but in California and Indiana cash is what you need.
Being an investor and purchasing forecloures as a way of making a living I would simply,find out the value of the house, how much the owner wanted to take over his equity, how many months the present owner is behind in his payments.
I would also check the insurance and taxes to insure they were paid or needed to be paid.
After doing some additional home work, I would see if this property was worth my efforts to acquire for sale or to use a rental. Find out the cost of any and all repairs.
Either way once I have determined that the property fit my idea of a property I would purchase.
I would then find me a closer, tell the closer that I an going to purchase the property subject to the existing mortgage. She would then find out from the lender the exact amout it would take to bring the loan current, the total amount of back payments owed. Fined out exactly what taxes are owed and when they were last paid. I would also tell her the exact amount the present owner would be getting.
From this I would find out from the closing agent the amount needed for me to assume ownership of the property.
The figures would work out something like this.
Value of property $165,000.00
Balance of mortgage $85,000.00
Back payments $5,000.00
Equity buyout to present owner $10,000.00 minus $947.50 (Closing cost and taxes his share) $9052.50 total cash to present homeowner $14,052.50 total consideration to owner includes back payments owed to lender.
Insurance $350.00
*Fix up cost $5,000.00
Closing cost $1,500.00 Divided by 2= $750.00 each
County Tax $395.00 Divided by 2 = $197.50 each
Total I would have to place in escrow would be $17,245.00
*Not taken to escrow or closing agent
A deed would be drawn up transfering the property to me. Escrow would close, the lender would get the payments that were late and due. The insurance and taxes would be current. I would then have to make the monthly payments on time to the lender.
Now that is if you want to live in the property.
If you were flipping the property you would advertise the property for sale after making the deal with the owner.
Once you have found a buyer which if you advertise correctly you can sell a house in 10-20 days. The difference is now you ask the new owner to come to escrow or closing with $17,245.00 and assume the first mortgage and since there is approximately $57,755.00 worth of equity you have the closing agent make a deed of trust in your name and have the new owners pay you a second mortgage. So they will pay you the amount due each month on the first mortgage as well as the amount due on the second mortgage.
Once you get the mortgage payment you subject the 2nd mortgage money from the 1st mortgage money and send the 1st mortgage money to the lien holder of the first.
Now that is the way that I would do it and stay away from the banks and trying to qualify for loans. You need not even talk to the current lender except through escrow to find out the exact amount to bring the loan current.
I hope this has been of some use to you, good luck.
"FIGHT ON"
In my area, if you are buying at the foreclosure sale, full payment is expected 1 hour to 48 hours depending on which company is handling the sale.
The "normal" way will give you clear title. If a home is in foreclosure, chances are the owner has other liens against him.
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