Buying an foreclosed home(anyone?)

posted 3 years ago in Money
Post # 3
687 posts
Busy bee
  • Wedding: August 2014

We bought a foreclosed condo, and couldn’t be happier! There were some title issues, which required us to spend something like $1K on a legal representative to deal with that. We’ve had our place for a little under 3 years and it’s already worth 60K more than we bought it for, according to zillow estimates. 🙂


Post # 4
325 posts
Helper bee
  • Wedding: July 2013

I think my dad bought his last place that way.. or it might have been off of a police auction. It seemed to work out well for him, minus having to fix the locks on the door and the wiring – they had screwed it all up so that they could grow weed in the house….

Post # 5
1311 posts
Bumble bee
  • Wedding: January 1994

My in-laws did. It was in decent shape, but needed some remodeling and A LOT of paint. And carpet replacement (with hard flooring). Still needs the kitchen done and the fireplace. Re-did all of the bathrooms. Put a lot of work into the yard. And that was considered a nice one. Not all are in such good shape. So it can be a risk. And a lot of work!

Post # 6
8677 posts
Bumble Beekeeper
  • Wedding: December 2012

Our friends and neighbors just bought a forclosed home. I don’t think they ran into any issues other than the insurance gave them trouble repairing the damage from a tornado we had, but that had nothing to do with the forclosure.

Post # 7
23 posts
  • Wedding: October 2014

Make sure it’s something you can get inspected and see beforehand. If it hasn’t been lived in for a while, or the people who lived there didn’t take care of it, there can be lots of problems. The bank is losing money on it and they want to get rid of it, so you won’t have warranties. As mentioned above, title issues can be tricky. I’d suggest finding someone around you who knows a lot about it and can help you make sure you’ve considered everything! It can work out really well if you get a sweet deal and a house that needs little work (or if you guys can do it yourselves!)

Post # 8
666 posts
Busy bee
  • Wedding: August 2013

My mom bought a forclosed/bank-owned home.  It definitely needed some work!  But the house was overall a good house and it was mostly cosmetic things we had to do (remove/replace carpet, paint, refinish hardwood floors).

I think this is a thing that entirely depends on the particular house in terms of quality and condition. 

The purchase itself was pretty easy – not much different from a non-forclosure purchase, except we were buying from the bank instead of a person.  However, she didn’t need a loan for it, though, so that may make a difference in the complexity of the process.

Post # 9
1287 posts
Bumble bee

When buying a forclosed home, you may have to pay any liens on it, depending on why its been forclosed. Ask the realtor or bank about it.  

Post # 10
95 posts
Worker bee

I’m a real estate attorney, and bought a foreclosed home earlier this year. There are some additional obstacles, and the process can take a little longer (in my case about 70 days to close), but I got a fantastic deal! $190K for a $260+ home (with an inground pool) in a coveted school district, in walking distance to restaurants, mall, shops and groce. Instant equity! The down side: the bank holding the home will NOT make any repairs so, if your lender (or you) requires any repairs before closing, you’ll have to do what’s called a 203(k) loan, which sets aside funds for repairs after closing (the funds are escrowed and you must use a licensed general contractor to do the work). If the repairs are non-structural, there is a streamlined version of this loan – it still takes a little longer than a conventional loan, but only a few weeks. If you need structural repairs, the process is longer (I did the streamlined). If you’re considering a foreclosed property, I’d suggest starting your loan application as a streamlined 203(k), and if no repairs are required, you can convert it easily to a conventional loan. I used Movement Mortgage and they were great!!! (Most of the well-known banks aren’t really set up to do these, so ask around in your area and get a referral for lenders that do this well and often.) Feel free to message me if you have more questions. Good luck!

Post # 11
11604 posts
Sugar Beekeeper
  • Wedding: November 1999

Just make sure you have a really, really good inspector so there aren’t any major surprises right after you move in!


Post # 12
232 posts
Helper bee
  • Wedding: May 2014


I bought a foreclosed home in August of this year. Luckily, when the bank took it over they replaced all of the kitchen appliances, added new carpet and painted everything. Now of course, this was the cheapest of the cheap, but made the house seem more move in ready. We got a $200,000 house for a total of $125,000. A STEAL. Of course, the house was built in 1997, and nothing was really ever updated, so as we grow in the house we will be updated the kitchen and bathroom. Also, there were some just overall maintenance issues, like the windows and doors needed new seals, door stops, blinds, etc etc. The home had sat for months after the bank came in so it needed to be deep cleaned, but overall I am so pleased with the experience. Like everyone else, I seriously recommend a GREAT home inspector, because there could be LOTS of hidden issues, like with any home. It also makes it fun because even though it may be a tad more expensive, you get to make the home truly yours. Also, prepare yourself that it may take longer to buy a foreclosure than a normal home. You would think the bank would want to get it off their hands as quick as possible, but we were very much just a file number and not people to the bank our home was owned by. Good Luck!!

Post # 13
9137 posts
Buzzing Beekeeper
  • Wedding: November 2013 - St. Augustine Beach, FL

@brokeninnj:  I did.  It was a great deal but there were issues directly related to the house being foreclosed on months before.  All of the appliances had been sold out of the house so we had the extra expense of buying appliances right off the bat.  Then the carpet had molded because the previous owners whom were foreclosed upon allowed their pets to urinate wherever and the A/C unit was turned off months before during the foreclosure.  So we had to rip out the carpet throughout the house and pay to have them replaced; another immediate expense.  Finally, from being turned off, the A/C unit was in disrepair.  We were able to make it work for the first year of owning the home but it was inefficient and died within the first year so another added expense.

It was a steal BUT the added expenses up front were painful since we were young new home owners and we had spent most of our money on the down payment so we ended up taking out some credit to pay for things like the appliances.

Post # 14
896 posts
Busy bee
  • Wedding: July 2009

@brokeninnj:  our first home (a condo) was a foreclosure.  We got a great deal and now we rent it out to an older lady.

Post # 15
47 posts
  • Wedding: June 2012

We bought a foreclosed home earlier this year. It had been sitting empty for a while, but it was still in great shape. Just like when you buy any house it needed new paint and carpet. The only thing when buying a foreclosed home, the bank will not fix anything. We were able to close on our house in 5 weeks and did not have any title issues.

There were no appliances in the house, so we had to buy them. There were other odd things that were removed from the house by the bank that we had to buy. Like a pp said, there probably will be a lot of up cost expenses when you buy a foreclosed home. Over all, we are happy with the house. The bones of the house was in a lot better shape than other non foreclosed houses that we looked at.

Post # 16
95 posts
Worker bee

Oh yeah – I should have mentioned – get a home warranty! I did and I’ve worn that company out. Microwave, A/C, furnace, drains, water line, and all of the pool mechanicals have been repaired and/or replaced so far. Well worth the paltry $350. Homes that sit empty (mine was for 2 years) inevitably develop a few problems from nonuse.

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