| Author | Message | ||
     Sifo |
Anyone here ever buy a foreclosed house? I'm considering it, but am not sure what I'm getting into. I know to expect poor maintenance in recent years. Because of that I would plan on having a professional inspector go through it. I've also heard that they can be closed on fairly quickly if you have cash available. True? I'm also guessing it might be worthwhile having a lawyer involved in the closing. Any further advice? | ||
| Sifo |
BTW, here's the suspect property if it matters. http://www.realtor.com/realestateandhomes-detail/9 360-Evergreen-Dr_Traverse-City_MI_49684_M45989-901 90 | ||
| Greg_e |
Lawyer - absolutely Inspection - wise but not imperative if the price is good Check on back taxes, sometimes you the buyer might have to pay these Many foreclosures are cash sales, that's the whole amount in cash so you may want to check on the terms. Also check to see if anyone is still living there, you may need to legally evict them which is a hole different process. You see this more with tax auctions, but worth mentioning. (Message edited by Greg_E on June 04, 2016) | ||
| Pwnzor |
My house was foreclosed on before we bought it. Had been on the market for almost 2 years. We got a real estate attorney to do the deal for us. I inspected the hell out of it myself, then hired a guy to come inspect it. Then we got the termite people to come inspect it again, and install the centricon system around the perimeter. We got 3000 sq ft on 1/3 acre, fenced yard, brick patio, 4br, 3ba, 2 story. They wanted $160,000, we offered $150,000 and they took it. The bank paid the closing costs. We looked at something like 50 houses before we decided on this one. I think we got lucky. The lawyer cost about 5 grand, I think it was worth it. | ||
| Pwnzor |
I just looked at all the pictures of your potential house... that looks like a great location. And, you can get real pasties up there... yoopie food. | ||
| Sifo |
Thanks for the info. $5K for the lawyer!  I have heard that they do much more than with a regular closing. Cash for the entire amount isn't a problem. Good points about taxes and anyone living there. Pictures look like it's vacated, but would be worth confirming. Haven't seen it in person yet. I may have to get up there again this week. We had an offer accepted on another house/10 acres of hardwoods. At that point they disclosed that they managed to get into a situation where they aren't allowed to change the footprint of any permanent structures on the property. Killed our plans! Found out they had lost other buyers because of it too. | ||
| Fast1075 |
Have the A/C and heat systems checked by a professional HVAC company. A PROFESSIONAL company, not a "home inspector". A non certified idiot with an infrared thermometer has no business "inspecting" a system. If the system(s) are old or have problems expect to spend 8-10K for modern high efficiency equipment and modifications to the air side to make them work like they are designed to. | ||
| Two_seasons |
Traverse City is not Yooper!!!!! I'm also guessing it might be worthwhile having a lawyer involved in the closing. ABSOLUTELY This is where you spend the money...and what Fast1075 said Have a PRO check for mildew/mold too and make sure there are riders, if needed, on your potential insurance policy...EXTREMELY IMPORTANT!!!!! | ||
| Pwnzor |
Take it easy, all I said was you can get yoopie food there... didn't necessarily say it was yooper territory. Lawyer was key to the process, and mine paid for himself by getting the bank to pay closing costs. That was $10k saved right there. (Message edited by pwnzor on June 05, 2016) | ||
| Ratbuell |
Or just go into it with eyes open. I bought one a few years ago as a rental. 3 years empty, bank owned, flooded basement/furnace because the bank had turned power off and the sump pump quit (duh). 2 apartments, 2 electric meters. Bought for cheap, good realtor covered all the bases, cash closing went thru in a flash. Changed locks and doors the day of closing and posted "no trespass" signs. Squatters can be arrested as soon as you close. It's YOURS at that point. I knew going in it would need HVAC and it now has 2 heat pumps (1 each apt) and a new roof. Still renovating upstairs apt (doing myself, on top of day job and second job), but downstairs has been rented for 2 years now, about $12k a year income. Zillow "zestimate", about $165k. I'm in it total for about $100k right now, not counting the 22 months' rent income this far. No lawyers, just a straight cash closing, open eyes, and standard renovation stuff. Know what you're looking at. Know your zoning. Know YOUR realtor and know you can trust them. Make educated decisions. Go to closing with new locks in hand (I use the kwik-set locks you can "re-program"). | ||
| Greg_e |
5K for the lawyer seems high, did they justify it in any way? | ||
| Badlionsfan |
Pwnzor, you can't get real pasties below da bridge! ....unless you have them shipped like I do! | ||
| Natexlh1000 |
I got an interesting observation for you guys. Perhaps you clever-trousers types can shed light. In Milford, MA, I saw a somewhat nice 1940's little house with garage go into foreclosure. After a year of it being empty, I saw that someone bought it and moved a camping trailer in the driveway. After a week or so, it became obvious that someone was living in the trailer but not the house. I had thought that someone scored the house cheap and was slowly fixing it up while living in the driveway. I thought this was pretty smart. But then a plot twist! They sold the house, took out the trailer and within a couple of weeks, the house was leveled. They then installed a new house in the same place. This whole turn of events has puzzled me ever since. | ||
| Sifo |
5K for the lawyer seems high, did they justify it in any way? Lawyer was key to the process, and mine paid for himself by getting the bank to pay closing costs. That was $10k saved right there. That could be considered justification. TC is not the UP. To be honest, I'm not sure where you would get pasties in the area. Probably not too far away. Doug Murdick's fudge is everywhere though.  This whole turn of events has puzzled me ever since. Teardowns have been a way of life in some neighborhoods near me. Then there was the couple in my in-laws in AR that bought a lot, moved in a motor home and built a huge garage. They moved the motor home into the garage and then built their house. | ||
| Strokizator |
Skip that place. Just up the road Michael Moore's Torch Lake house can be had for a cool $5 million. If I hadn't bought my house from the people who owned it outright I definitely would have used a good real-estate attorney. Move to the U.P., you won't live longer - it'll just feel like it. | ||
| Pwnzor |
I've been known to drive 3 hours just to have good fish and chips for lunch. That place is close enough to good pasties for me. And ring balogna. Gotta have the good stuff. | ||
| Court |
>>>5K for the lawyer seems high Depends on the location, the type of law and the circumstances. In NYC the attorney that handled my personal stuff billed at $880 per hour . . . the attorney back in Topeka, KS more like $180/hr. I tease here at home because the better half, and some of her cronies, bill at $1,500 per . . . but she speaks a host of languages . . . and is currently representing Bahraini investment banks in a major international litigation with one of her partners in Doha and doing a death penalty case in Texas at the same time. you don't get that for $150/hr. My best advise . . .with regard to attorneys . . . is to get someone you are comfortable with who REALLY knows the subject area. My bet is that a good real estate attorney, in many parts of the USA, can be had in the $200/hr range. | ||
| Sifo |
Skip that place. Just up the road Michael Moore's Torch Lake house can be had for a cool $5 million. Please tell me he's moving out of the area! My mom used to live right across the lake from Moore. Big enough to see across the lake! My nephew saw him in TC once. He actually offered him an autograph! My nephew turned him down. | ||
| Greg_e |
I wasn't really disputing the price, just wondering if that attorney projected a serious number of hours on this sale. Again local codes and regulations may well deserve the $5000. Most realty lawyer are billing around $200 here, unless the property is worth half a million or more, and then the amount goes up. Kind of a sliding scale and I don't really see a fault in that as it helps me out on the lower end. | ||
| Pwnzor |
He guaranteed us that we would not have to pay closing costs, and he paid for the property to be inspected. | ||
| Robertl |
Our first home, near Tampa, was a foreclosure. Our realtor was well versed in foreclosures and checked back taxes, leans, etc. We paid asking price. Bank paid all closing, inspection, and realtor fees, plus 3k towards some repairs. Think we closed in 30 days, even with a FHA loan. We used an inspector but later realized he probably wasn't the best. Not sure any are. They all seem to miss some stuff. Nothing major, just wish he would have said something about the aluminium patio cover they roofed over b/c it caused some issues when we sold. There was also no roof venting with open permit. Fence didn't meet code and permit never closed so we lost half the fenced yard to meet code. We still lost 5-10k (remodel, fence, etc) when we sold it but if we could have waited a couple of more years, we would have seen a decent profit. Zillow reports its value about 30k over what we sold it for in 2013.  Sadly the market is not the same as it used to be and foreclosures are not the mega deals they used to be. Banks are looking to profit rather than just unload the property. I'd buy another, just be a whole lot more careful about inspection and including any and all repairs that are or might be needed in the near future. | ||
| Sifo |
True the inspectors miss plenty of things. They are general knowledge people, not specialists, so there's plenty they won't know. Good reason to have a specialist look at big ticket/complicated systems like HVAC as has been suggested. Thanks for all the comments. Hoping to get up there looking this weekend. | ||
| Brighton |
Do NOT use any inspector (realtor, banker, lawyer, etc), that is recommended to you by anyone who is in any way connected with selling the house. Find your own. I say this not because I think you're naive, but because I was when I bought my first home several years ago. | ||
| Sifo |
Just found out this property has a contract pending on it. Real estate is selling fast up there. I'll be up there in a few days to house shop and will be able to move if we see something nice. We've missed a few nice properties by not being able to move quick enough. | ||
| Greg_e |
Zillow is full of $#!+, my lady's house is said to be valued at $50k over what she paid, we'd both be happy to take that much and use it towards something else with better interest rates due to the large down payment. Every time she checks it and says the amount, all I say is 'SOLD!" | ||
| Robertl |
Zillow predicts home values using the data nearby. Lots of things can throw those numbers off, including foreclosures. These data points change hourly so nothing can be perfect. We used Zillow info to sell our house and buy our current one. Oldsmar, FL in 2013: Zestimate: 149k. Sold 158k. Current Zestimate: 195k. Don't recall what we listed it for but it was under contract within 3 days for over asking price. Something fell through, probably financing and we had another offer within the next week which went through. Coworker's sister listed her house in Lake Mary, FL the other day. It sold the same day, all cash and 30 day or less close. Watching properties in the Nashville area just to get an idea of how things are moving. Several I've saved on Zillow have sold within a few days or week of me seeing them. Not sure if it is the risk of interest rates going up or just the economy in general but housing is hot right now. Good luck in your search. Almost forgot, a friend in Austin, TX said his rental property went up 100k in value in the past 5 years so they raised the rent accordingly. (Message edited by robertl on June 06, 2016) | ||
| Airbozo |
House next to me went to auction in October, but I have yet to see what it supposedly sold for. I know it was in foreclosure and I know there were/are back taxes on it. I also know there are septic issues that at the moment cannot be legally resolved (EPA/Fish and Game issues since it is on the hill above a creek). Zillow shows it valued at $513k! Which is completely absurd since it is not habitable. They show mine as only being $505K and we have twice the land, all of it mostly flat and usable, and my house has been completely remodeled right down to the studs and new roof structure. So yeah Zillow is not even a close guess where I live. I too have been looking into foreclosure property and would not touch one without a lawyers involvement. I am paranoid about real estate legal issues though. | ||
| Robertl |
Why not read how Zillow estimates those numbers? http://www.zillow.com/zestimate/ I would assume if that house was in average condition, based on the zip code, square footage, houses in the same area, etc. those values would be close. It is not uncommon for remodeled properties to sell above asking or Zillow estimates but then this sell price eventually brings up the value of surrounding properties, just as foreclosures often reduce the values. Don't bash the game until you understand it.  | ||
| Pwnzor |
Zillow pretty much right on the money where I live | ||
| Airbozo |
I completely understand how they get their estimates and stand by my statement. Still think they are way off. They don't take into account usable land, condition of property, etc. At least where I live, houses in the same neighborhood can sell for widely varying prices just based on what side of the street you are on or if you are near a creek or not. Mostly due to how much sun a property gets and the flatness of the land. 5 acres with a 3br 2 bath house can go for $1.2 million on the sunny side of the road and $550k on the shady side. Comps rarely divulge those sorts of facts and is why a site visit is a must. |
