Buying A Home In Foreclosure
Hello Kate, I am interested in buying a home in foreclosure. The purchase would be a second home in another state for an investment and vacation home. The county sheriff has a sale every week with dozens of homes that are offered at 2/3 of the appraised value as a starting bid.
I have attended a couple of these sheriff sales to see what the vibe was like, and I have to tell you that I really think that there are some good deals to be found. As is with any auction, the price may go up to a point that it doesn't seem so attractive, but for the ones that I have seen sell, the plaintiff is usually the one to buy back the property for the open bid amount. This basically means that you would have 33% equity on the property if you were able to buy it for the open bid.
My concern with purchasing one of these properties is the "unknowns" of a foreclosed property. The condition of the interior is a surprise for the most part because these properties are sold as-is, without inspection. I have peeked inside a couple of these homes that I am interested in and I could see that they are in decent shape.
I am sort of a handy-man, so the fact that I may have to put a little elbow grease into the home doesn't bother me. However, I don't want to over invest and have more into the home that I may be able to get out of it someday.
To buy one of these sheriff sale properties, you have to give 10% deposit by noon, the day of the sale. Then you have 30 days to give the balance. I want to be pre-approved before I take action on a sale to make sure that I don't get in over my head.
Mortgage question: Will the lender use the appraisal of the county as the property value, which in my case would help towards a good LTV? Are there any other surprises that I may be overlooking? Thanks, Frank
Kate Answers: Buying A Home In Foreclosure
Hi Frank, Thank you for contacting Get-Your-Best-Mortgage-Rate.com with your question. It is obvious you have done your homework. I think other Readers will enjoy reading your letter.
I have also answered your two questions about buying a home in foreclosure at Buying A Foreclosed Home
. I hope you will find these pointers helpful.
Please feel free to come back to my website again in the future with more questions. Of course, you can invite your friends to comment on this page or create one of their own.
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