Forclosure Houses

crookedoak · #1 04/06/11, 02:07 PM

Has anybody ever bought a forclosed house? I am looking at one and I am concerned about the right of redemption.

Erin

kellyst · #2 04/06/11, 02:27 PM

I'm not sure which state you're in, but each state has different foreclosure laws. In general, I would not worry too much about someone redeeming their foreclosed property. If they could have afforded to reinstate their loan in the first place and wanted to keep the home, they probably would have before it was sold at sheriff's sale. In Ohio, to redeem a home you have to pay the whole amount owed on the loan, not just the reinstatement amount. Few people can do that.

crookedoak · #3 04/06/11, 02:32 PM

I live in Alabama. Do you have to wait the full year before you can move in or make improvements???

kellyst · #4 04/06/11, 02:38 PM

I'm not sure about Alabama's foreclosure laws. You can probably find some good info on the web or maybe find an attorney who does free initial consults. In Ohio, if the buyer pays the full amount within 30 days of the sale and the original owner does not redeem the property, the sale is confirmed and finalized. Also, there can be other things to worry about like liens that are not vacated through the foreclosure. Personally, if I wanted to buy a house at a sheriff's sale I would privately pay to have a title search done ahead of time. Cheap insurance for about $200. Bottom line in my opinion, consult with an attorney before you get serious about buying.

bluemoonluck · #5 04/06/11, 03:04 PM

I've bought 2, both in the state of VA. I've never heard of "the right of redemption"

I always operated under the impression that if the real estate agent can legally sell it, the bank that owns it can legally sign ownership over to you, and it passes title check, you're good to go.

kellyst · #6 04/06/11, 03:22 PM

Each state is different when it comes to foreclsoure laws and there can be a lot of pitfalls in buying a home directly through a sheriff's sale. The best advise I can give you is consult with a real estate attorney in Alabama. I'm an attorney in Ohio, and given Ohio's laws I would be very careful buying directly through a sheriff's sale. I would at least pay to have a title search done before buying.

featherbottoms · #7 04/06/11, 03:40 PM

We bought a foreclosure here in Georgia and as best as I can tell it was offered at the sheriff's sale a few months before we found it in the real estate section of the Sunday paper. I do not think it sold in the sheriff's sale (there is no sale for that time listed in the transfer info at the tax office). We bought it from that realtor who was listing it for Fannie Mae.

We looked at the laws of Georgia for sheriff's sales and would feel uncomfortable buying property here that way. I forget why but I think it was because of a 1 year wait before you can do anything to the property, including cleaning it up. You are kind of in legal limbo. You don't actually own the property but your name is on the property as purchaser. At least that's the way I read the laws here. I would not even consider buying at a sheriff's sale here without an attorney involved.

featherbottoms · #8 04/06/11, 03:44 PM

Quote:

Originally Posted by bluemoonluck

I've bought 2, both in the state of VA. I've never heard of "the right of redemption"

I always operated under the impression that if the real estate agent can legally sell it, the bank that owns it can legally sign ownership over to you, and it passes title check, you're good to go.

I think the "right of redemption" comes from a sheriff's sale, not a regular real estate purchase through a realtor. But, I don't know for sure.

Nevada · #9 04/06/11, 03:49 PM

I bought my home at a foreclusure auction (trustee sale) about 18 months ago. Unless the owner alleges fraud or improper procedure, the trustee sale is final. However, unlike a tax sale, liens are still valid on properties sold at a trustee sale.

There are normally 300 to 700 properties sold each weekday in Las Vegas, averaging about 500/day. I had to come up with a pre-qualification process that I could do quickly online without actually visiting the house, so I could pre-qualify perhaps 50 properties each day. It went something like this.

1) Only look at properties in zip codes I was interested in.
2) Only look at properties that I anticipated would be in my price range.
3) Only look at single family homes, since I didn't want a condo.
4) View the property with Google street view.
5) Look-up the property at the assessor's website to learn the last selling price, sq. ft., bedrooms, baths, year of construction, lot size, pools, etc.
6) Look-up the property at the treasurer's website to see how much the taxes are and if they are paid up to date.
7) Look-up property at the recorder's website to see if there are any pending liens.

If you do those things you are taking 90% of the risk out of buying a foreclosure. There are still possible pitfalls, such as there is no way to tell if the house has been vandalized or copper-stripped, or even if there are foundation problems, but assuming risk is part of why you will be so bidding low.

kimmom2five · #10 04/06/11, 04:36 PM

We are in the process of buying a foreclosure through a realtor selling it for Fannie Mae. Except that it is sold as is our realtor has said it is pretty much a normal sale. It was kind of creepy discovering the former owner works for the company who does the security system for the house. He took several appliances when he moved out but told my husband he's not bitter about losing the house.

wottahuzzee · #11 04/06/11, 06:16 PM

I am in the process of buying one here in Florida. It is my understanding that in my state, Florida, once it has been legally foreclosed on in court, there is no right of redemption. You only have the right of redemption up to a certain point. I did tell my realtor I wanted title insurance in case somebody surfaced that thought they had a claim, doubtful, but wanted to cover all bases.

crookedoak · #12 04/06/11, 06:52 PM

The house went up for sale on the courthouse steps early March. I had seen it for sale last winter. The house is in wonderful condtion, on a dirt road. It has two barns and 11 acres. They are only asking 85,500. Some mortgage company bought it and has a realtor selling it for them. I just wonder if we get it, do we start paying for it as soon as we get it, wait till the year is up on the R of R??? I have never bought a house before, so all of this is Greek to me;-)

Beeman · #13 04/06/11, 07:09 PM

I think there's confusion about foreclosure and tax sales in this thread. Research your state's laws and have a good lawyer do a good title search.

crookedoak · #14 04/06/11, 07:10 PM

No, that are calling it a foreclosure. And all I know is that it is really confusing!!!!

kellyst · #15 04/06/11, 08:49 PM

Ok this isn't a true foreclosure then. Just look into the right of redemption a little bit in your state.

halfpint · #16 04/06/11, 09:02 PM

I live in Alabama and foreclosed on a home that we sold but held a 2nd mortgage on. What was explained to us was after foreclosure, the 'owners' had the right to come back within two years and pay what they had originally owed on the property to get it back, plus any back taxes and legal fees involved in the foreclosure that we paid. Any improvements that we made to the property would be lost by us if this happened. This also makes it difficult to sell, so we rented it for several years before selling it. This was about 18-19 years ago, so I'm not sure if things have changed any.

My parents home was also a foreclosure in GA and they have purchased several foreclosed homes for rental properties and have never had a problem.

Dawn

Nevada · #17 04/06/11, 11:56 PM

Quote:

Originally Posted by kimmom2five

We are in the process of buying a foreclosure through a realtor selling it for Fannie Mae. Except that it is sold as is our realtor has said it is pretty much a normal sale. It was kind of creepy discovering the former owner works for the company who does the security system for the house. He took several appliances when he moved out but told my husband he's not bitter about losing the house.

Since the topic of what is and what is not a foreclosure has come up, if you are getting it through a realtor it's not a foreclosure. Foreclosures are offered in public auction formats. What you are making an offer on is most likely a home that a bank foreclosed on, yet no investor was willing to outbid the minimum bid set by the bank. The result is that property ownership reverted to the bank.

When a bank offers a foreclosed property that they have taken back it is then called a bank REO (real estate owned) property, not a foreclosure property.

Jena · #18 04/07/11, 12:01 AM

Most of the time, the bank "buys" back a house at a sheriff's sale, then sells it through a realtor or auction later. I bought a HUD house a few years ago. I paid cash and the deed was signed at closing. I think if you go through the realtor, you are ok. If there is anything weird, they would have to tell you about it.

crookedoak · #19 04/07/11, 02:51 AM

I have a copy of the Forclosure deed. A "finance" company owns the property, but a realtor is selling the said property. But she told me to tell my mortgage guy that it is in a R of R for 12 months. I just really would hate to go in, and do work just to find out the owners will get it back. This is my dream place. It is nothing fancy, but well built, and has the perfect layout.

kimmom2five · #20 04/07/11, 06:55 AM

Quote:

Originally Posted by Nevada

Since the topic of what is and what is not a foreclosure has come up, if you are getting it through a realtor it's not a foreclosure. Foreclosures are offered in public auction formats. What you are making an offer on is most likely a home that a bank foreclosed on, yet no investor was willing to outbid the minimum bid set by the bank. The result is that property ownership reverted to the bank.

When a bank offers a foreclosed property that they have taken back it is then called a bank REO (real estate owned) property, not a foreclosure property.

All I know is that on the MRIS listing the realtor sent it says Foreclosure?-Yes and both realtor refer to it as a foreclosure. And I don't believe it was offered at auction before it was listed. Maybe just a different process for a different state.