I wanna know about buying a house by forclosure.What’re the pros and cos of…

Credit and mortgage advice Forums Buying Your Home I wanna know about buying a house by forclosure.What’re the pros and cos of…

  • This topic has 8 replies, 7 voices, and was last updated 10 years ago by Anonymous.
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    • #207350

      …it?What’re the steps to follow? How should I start ?

    • #266586

      Most foreclosed homes can be purchased a the Sheriffs Sale, it is a bidding process and you have to have your money ready then if you win the bid. Most of these homes can be in rough shape and needs repairs. They aren’t the “great deal” that everyone thinks. If you’re looking to purchase I would use a Realtor knowledgeable in this area to help you. You won’t save money by going direct, and in most cases the banks/lenders won’t deal with an individual wanting to get an even more reduced price. Know what I mean?

      So your first step is to find a Realtor who has handled these properties.

    • #274528

      Take your time and find a local R.E. expert on forclosures. Also you want to make sure that there is enough equity in the house especially because everyone is offering deals right now.

    • #275260

      You won’t find out here! You need to research, read investor message boards and find a mentor of sorts to help you through it. It’s a legal mess to be honest with you. There are so many scammers out there and new laws and regulations keep popping up; It makes doing honest business very hard. Don’t jump in unless you know exactly what you are doing. if you know what you’re doing you can do a great service to everyone, the banks that don’t get properties back, the sellers that don’t get foreclosed upon, the buyers that get a nice property at a great price and your bank account will love you to.

      Contact me if you need a place to start researching.

      And PS, don’t waste your time on foreclosures, get them pre-foreclosure!

    • #276518

      FIRST you find out what the redemption period for your state is as this can be rare but a real nightmare to find out 3 months later the people have found the funds to save their house. Happens VERY rarely but it can in states with a lenghty redemption period.

      Then the advice given by bdancer is excellent.

    • #276711

      get a list of foreclosures. you can ask banks for this or subscribe online.

      the pro is you will pay a lot less for a house

      the con is the house will almost always be in rough shape on the inside. no one likes being thrown out of their house / losing their equity position. many houses have broken mirrors / tiles/woodwork / glass broken . doors punched through / holes in walls. water damage / a c / heat problems .

      you have to know what you are buying and able to estimate what it is going to take to fix it and get it turned over and sold in a slow market. every month you are sitting with a house / you are losing money.

      if the house is for you / then you will not have as much pressure at selling it fast.

      good luck.

    • #437166

      From a financial standpoint your brother should pay off all of his higher rate debt first. While paying each of your credit cards down to 50% or less is very important your brother will still see great benefits to his credit score and his financial situaiton by paying down the higher rate credit cards first. Overall, his amount of total credit limits for all of his cards compared to his balances will still improve which will still help him out tremendously. See the credit scoring blog below for more credit tips.

    • #437167

      Ok, so your brother has a few problems… The credit cards themselves are hurting his credit like you said. But in order to raise his score to the point where the interest rates would drop each card would have to be lower then the 50% mentioned. Most lenders tend to look for no more then 15%-30% of the balanced owed and so the credit score reflects that. Tell him to make the largest payments possible on all of them to help his score the most.

    • #437168

      You know, this depends on what he wants to do. If he wants to get out of debt as quickly as possible, it is better to pay off the lowest balances first, one at a time…or to start with the card with the highest interest rate and pay that one off first. However, be sure to tell him NOT to close his accounts because this will bring his score down.

      Now, if he wants to get more credit, or a home loan, the best thing he can do is to pay all his balances to below 50% of what he owes. This will bring his credit score up quite a bit and give him a chance to get more credit.

      If he’s trying for a home loan, his debt to income ratio should be based on what he tells them he makes. The more he says he makes, the lower the debt to income ratio. Basically, this only comes in handy if he’s buying real estate. His best bet for credit cards and other loans is to just get below 50%.

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