Buying Foreclosures, Part II

Buying a house at the courthouse steps is not for the faint of heart. It is filled with many pitfalls that can trip up even the most experienced purchaser. A good friend of mine who regularly buys at the steps told me about a problem he had with a purchase. I won't bore you with the details but to only say he still has $60,000 tied up in a property that he doesn't own.
.
Real estate broker and writer John Adams was quoted in the AJC article on Sunday as saying: "The auction is a much more advanced technique, and quite frankly, it is almost impossible to fully protect yourself against some of the threats that are out there." So how can the average person pick up a good deal from all the foreclosures on the market now?
.
Post foreclosure is where you want to look first. They are easy to find and the risks can be determined with a little effort in advance. These are properties that the lender has already gone through the legal process of taking the house back by purchasing it at the court house steps and have listed it with an agent. Great deals can be found here if you are willing to overlook some flaws in the property.

Because the lender has never lived in the house, no sellers disclosure or termite letter will be provided. Not that you can't find this information out on your own but the lender will tell you WYSIWYG (What You See Is What You Get). AS IS really means AS IS! No Warranties really means No Warranties! You are on your own to find out any and all problems the house has.

.

Next, you will have access to the house. You can hire your own inspector and termite company. You can inspect and test every system in the house, but it will be at your own expense and you will have no recourse to the lender if you miss something. If you find something that needs repairs, the lender won't care. They will not repair anything so you have to know what the house needs and the cost to fix whatever is broken.

.
So what is the upside?

.

You get a great price. How much of a great price are we talking? I would caution anyone buying a house this way to get at least a 30% price reduction from retail price.

.

"Come on Michael, the lender won't go that far!" I'm sure someone is saying right now.

.

Yes, they will - and even farther if needed. Right now is such a great time to buy one of these that I am personally about to enter negotiations on one myself.

What makes now such a good time? It is close to year end and the banks want the bad loans off the books before the new year. For every $1 in non-performing (bad) loans that lenders have on the books, they are required to keep a certain amount in reserves to cover that bad debt which means there is less money they can lend.
.
The other way to buy these type of properties is to find the seller before the sale at the courthouse steps and make a deal directly with them. This is time consuming and often impossible because they often abandon the house and leave the area. There is also only about 30 days fromo the time that the public is notified until the bank forcloses. You must be able to close very, very quickly if you can even find the owner to sell the house to you. Many of these owners owe more than the property is currently worth so a deal is not even possible.
.
Please call me if you have any other questions or would like to pursue purchasing a great deal from a lender who wants out. I have seen several excellent deals in Cherokee County and would consider it a privilege to help you meet your goals.

.

How can I serve you today?

Michael Bradford
770-862-8002