problems of buying foreclosures

  • September 25 2013 - US
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Answers (2)

There can be many unforeseen problems when you buy a foreclosure.  The short answer is - the list of potential problems can be long.

Many times utilities are not on.  The buyer may be responsible to pay to have then turned on for inspections and then turned off again.  If the property has been winterized same deal. Pay to re-winterize it again.

Condition can be a huge obstacle and the cost of making the home livable ads to the amount you have agreed to pay.

Deeds are sometimes not recorded in a timely manner after the foreclosures and that delays closing.  It can cause you to pay a higher interest rate if the property takes more than 45-60 days to close.

There can be unsatisfied liens that do not show up until title search.  That can delay things further and prevent closing.

I have a Fannie Mae I am doing now.  We went under contract in the beginning of August.  We did inspections right away.  The buyer was approved by Home Path.

The property was foreclosed on by the local Sheriff either in June or July.  The bank did not pay the sheriff for conducting the sale until September 11th.  Therefore no deed was prepared.  Additionally notice was not given to a lien holder so that lien was not removed.
The attorney for the bank estimates it will take 2-3 months from the 11th to get the deed and clear the lien.

There was no way to anticipate the problem.  The listing agent did not know.  We did not know. You are dealing with layers of people and relegated to communicating only electronically.  The layers don't talk to each other.

We were ready to close way ahead of schedule. Now a deal which should have closed in 60 days will take 5 months to close.



  • September 27 2013
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Profile picture for Outer Banks N C
I am assuming you mean homes that were foreclosed sometime in the past, they are often then bought by the bank and sold later as a bank owned home or also called a REO. Just find a Realtor to guide you, they will be listed on the MLS and sold there and they are just about like buying any home from anyone, it is just now owned by a bank. Not much different at all from buying a home from Mr Jones.


tim
  • September 25 2013
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