Upcoming Foreclosures

are foreclosures a scam or can you really purchase a home that way?

I don't have a lot of money to make large monthly payments but I would rather own then rent. So, I was thinking of purchasing a home that is in foreclosure because the monthly payments will be affordable since the dollar amount is lower. Can something like that really be done?

Public Comments

1. yes--definitely,but you have to know what you are doing--and the law
2. Sure can. You can buy a foreclosed home & you would pay the back taxes on it.
3. Don't limit yourself to only looking a foreclosures. The bank that owns them is required by their stockholders to sell them for the highest price they believe the market will bring. They are in the MLS along with all the other houses. The TV stuff that says you can buy a house for 12 cents is a scam. But there are some good deals out there right now. Look at all homes that are in your price and size range. Also pay a lot of attention to the location.
4. Yes it can be done, but dealing with the loss mitigation departments at the various lenders can be a tedious process. So have your patience and persistence skills honed if you decide to try this. Don't limit yourself to foreclosures, there are plenty of other deals out there. There is plenty of misinformation out there about foreclosures and if you've heard that you can purchase a foreclosure for pennies on the dollar, that is just wrong. Some distressed properties are going cheap, but basically the value is the lot. Lenders are in a position to hold out for a good price, and they obtain appraisals and broker price opinions to determine market value.
5. It is possible to get a good deal on a foreclosure, but you shouldn't limit yourself to only looking at foreclosures. I'm currently in the process of buying a foreclosed house, but it's still pretty expensive, and the previous owners really didn't take good care of the house. I'm only seriously considering it because I'm buying it as a fixer investment. The asking price for the foreclosed house I'm looking at is only 50k cheaper than the similar sized houses for sale in the neighborhood, and it is going to cost me several thousand dollars to make it inhabitable. Your best bet is to find a realtor and work with them. They have access to a database with all the listings of available homes, and if you are interested in foreclosures, they can quickly alert you to their availability. Another thing: look around for a mortgage lender that offers a first time homebuyer's program. I'm in one, and it has a low interest rate, and requires no downpayment.
6. I am doing it. Cost is at about 70%. You will still need to qualify for a loan, have a down payment and all of that. It really isn't much differant then a regular sale, only it can take forever.
7. You can, but you might also do as well or better with a realtor. If you have someone who has a lot of equity in the home and has to move right away, they will be willing to sell at a low price because they will be able to pay off the mortgage and get out. You may do better than a foreclosure where the huge mortgage has to be paid off as well as back taxes. Some houses are going into foreclosure because the mortgage is larger than the current value of the house.