by Frank
(Florida, USA)
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
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