Profile picture for Maxis

Foreclosures

I have a question in regards to buying a foreclosed property. I recently went into a local Sheriff’s website and found a list of foreclosures. There was an option to see listing of sold properties in the past month. It lists the date, amount sold and the purchaser. Unless I was mistaken, most of the properties were sold for One hundred dollars ($100). How could this be? I know when you buy foreclosed properties, you as the buyer are responsible for all the liens; etc., but what am I missing? Can some please fill me in. Thank you!

Maxwell
  • July 26 2007 - US
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Answers (18)

Profile picture for BayWind
If they were bought for $100, that was the minimum bid. It usually isn't an individual buying the mortgage. It is more likely a secondary lien holder buying it to safe guard their investment in the property. If it doesn't sell at the Sheriff's sale, it goes back to the bank and the secondary liens are wiped out. If it is a really good deal it is usually settled prior to the sale.

My advice: Don't buy anything without a title search first.
  • July 29 2007
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Profile picture for Pharos17
Does anyone have information or direction on where you can find phx foreclosure properties?
  • August 09 2007
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Profile picture for ajsab01
Does anyone know a site that list foreclosure properties for free. I google a couple of them, but mostly they ask to join first to see in detail about the properties.
  • August 16 2007
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http://www.usa-foreclosure.com/
http://www.ctcres.com/
http://www.fidelityasap.com/login.aspx

These are sites one or more trustees use to post information. They are all free, but might require registration.

Be careful. Buying at a foreclosure is risky.
  • August 16 2007
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Profile picture for Impala67
What about foreclosures in Cape Cod. Where do I go to get that list?
  • August 16 2007
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Profile picture for Chelsy_
I also got the same questions, how can we buy a foreclosure property for the affordable price?
  • August 16 2007
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Profile picture for CUDude2
Krismer, could you enlighten me on the dangers of purchasing a foreclosure? We were actually looking at a foreclosed condo.
  • August 16 2007
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If you want to buy foreclosures I would recommend doing it thru a wholesale seller. There are several companies that sells you foreclosures at a discounted price, although not nearly what the bargain would be if you could buy one outright at the sales. However buying a foreclosure from the auctions is a HUGE risk, I wish I could make those capital letters jumbo capital letters. Its THAT risky!. If you don't know what you are doing, chances are HUGE that you will buy a property that you just really don't want to own, or a title you don't want.

For starters the most common mistake done when newbies buys at sales is that they don't do their title search. So when they go to the auction they have the houses they want to buy listed and when they go up and noone else bids, they go ahead and buy the property for a dime on the dollar. Happy buyer, right? Well....there is a reason noone else bid on it, chances are you just bought yourself the second mortgage on that property and guess what...it's yours and YOU are responsible for paying it back. Secondaries can foreclose on house without the permission of the first mortgage, doesnt mean they will get their money back but they will try. So now instead of owning a home for a bargain price, you own no home but a mortgage that you need to pay off. Great deal?

Thats just a SMALL starter as to the problems buying them off the auction. Unless you are going to put huge amounts of time and energy into buying at auction, and REALLY do your homework, I would buy from a wholesale company or in the open market where there are deals to find every day.
  • August 16 2007
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Profile picture for CUDude2
Thanks Justyn, great information. The one we're looking at is on the market, thank goodness. Do any of the wholesaler's have a website we could look through?
  • August 16 2007
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The main risks are the property may have structural or other defects, it may be dirty and full of trash, and the title might not be as clean as what you think.

Then there's the whole thing about buying the wrong type of property. For example, I wouldn't suggest buying a one bathroom house, because that will limit the upside potential of fixing it up.
  • August 16 2007
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Maxis, the $100 you see in the deed is part of "consideration". The actual dollar amount of the sale is almost never conveyed in a deed.

When you read a deed you will see language similar to this:

The grantor conveys the property to the grantee for the sum of $100 and other consideration....

Two definitions of consideration are in every deed:

1) a promise for a promise: The seller promises to sell the property to the buyer, and the buyer promises to buy the property from the seller.

2) Value: the dollar value, and other "consideration", which could be the actual amount of the sales price or other barter, i.e. land for land, is what is enclosed in the "other consideration" language in a deed. The $100 value, plus the "other consideration" term, makes the deed a legal binding document.

You need to look at the actual tax record to determine the sales price. It is akways available at the courthouse or most of the time available online (if your jurisdiction puts it there).
  • August 17 2007
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Profile picture for FavoriteAgent

I found a pretty good place to search for foreclosures for free. Takes a little work but its good.

Foreclosures - Houseflow.com hope it helps.

  • February 27 2008
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Profile picture for toddward33

Please keep in mind that every state and county handle foreclosures differently. Getting answers here is dangerous because though the people who respond are giving correct answers for their locality. I would never pay for a title search because there is one available for free in the case files to be found online in my county for instance. You just need to learn what is available to you and if your going to bid at the auction I would suggest making your own list. If not and your going to buy after the auction then contact a Realtor who can show the bank owned homes. I've been buying for 16 years now and I think the best deals are in REO's.

  • April 07 2008
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Profile picture for toddward33

Let's try that link again for making your own list.

  • April 07 2008
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Profile picture for FavoriteAgent
Another good way to buy foreclosures in Auctions. There is physical foreclosure auctions and online bidding (which actually has lots of foreclosures currently listed on MLS) But you have the option to bid from a much lower number. Not sure why more real estate buyers arent looking into this.
Try this place for more information - [link removed by moderator]
  • October 13 2010
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Don't try to buy a foreclosure on your own or based on advice of people on a site like this.  Foreclosure laws vary dramatically state by state...and people here are guessing as to what the $100 prices you're seeing are.  You need to work with a real estate agent or attorney who knows the foreclosure process in your state.
  • October 13 2010
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How did you twits find a post from 2 years ago to write on?

Nevermind the why! how did you do it?

  • October 13 2010
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Profile picture for dacolan
I suspect the ironically self-dubbed, "FavoriteAgent," dug up this post in a keyword search for "foreclosures" with the sole intent of infecting the board with his SPAM-link (that has appropriately been removed).
  • October 13 2010
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