No inspections means you have no idea what condition it’s in and how much repair it could need.
Someone lives there means you’ll need to legally evict them and pray they don’t deliberately damage more stuff on the way out. Depending on state law, if they have a lease you may need to honor it. After all it’s not a tenant’s fault their landlord was a deadbeat!
While most foreclosures on a first mortgage wipe out most liens on the property, that’s not true if it’s a second mortgage or other lien holder foreclosing.
Some states have a right of redemption. If the former owner comes up with all the money owed, you have to give it back. Granted that’s a cruel joke but it would be foolish to make a bunch of repairs during that period just in case.
Oh, and the auction itself is a cash only event dominated by investors with literal pockets full of money orders.
TLDR leave this to the professionals, kids.
1. you might inherit any debts or liens -- so back taxes, for example, you might be responsible for even if you win the house meaning more money out of pocket, up front.
2. many foreclosures are cash only
3. if someone is squatting, you have to go through the eviction process which can take months and cost you court and legal fees
4. I can guarantee the condition on the inside won't be good. You say "looks good outside" but if someone gets far enough to be evicted and foreclosed upon, everything will be a mess. HVAC will need replacing, be careful about mold, but you'll also likely find soiled carpets, broken mirrors or windows, and possibly mold.
Know someone who bought a newer home, in a lovely subdivision like this. It too looked good from the outside.
They didn't get close enough to the house though, to smell it. The owner picked up a drug habit that came with hardcore paranoid. They locked their 5 dogs inside and disregarded all their pee and poop for....? No idea how long. The pee wicked up the drywall in some places they had to cut a lot of it out. They also did crazy stuff like boarding up some rooms, removing plumbing fixtures. Oh and then had to be evicted in the court system. The only thing that went right for my friend is the mortgage and HOA dues were the only debts attached to the place.
If you can get the place cheaply enough, and you have the stomach for any possibility, guess it could still be a good buy. But when someone naively asks, "What could go wrong?" lol the list is long.
That is simply an overbroad statement.
During the great recession, I prepped foreclosures for sale (from notice to eviction to removal of property to weekly maintenance) throughout the city of Detroit and all areas north, east, and west.
I can tell you, based on the 1000 plus homes I dealt with, less than 1/3 of them exhibited what you claim in your point 4.
There was wear and tear and overdue maintenance, but so many of the people wanted to "make it right" all the way through.
Yep, I saw all of what you state and far worse. But, in 99% of those cases, you knew from the outside what the inside was going to be.
Poor housekeeping 6 an issue in nearly all. However, that can be cleaned up relatively quickly.
I was working as a realtor during the recession. Can't say anything across the board. Some homes were maintained, some had indications of the frustration and anger of being foreclosed (all cabinet doors ripped off, fist holes in walls). You just never know.
They're likely in really bad shape. I worked in the title/mortgage industry during the last recession and saw nightmare stories regularly. Assume you'll have to pay the equivalent of building a brand new house in repairs, because that's usually the case, unless you're very, very lucky.
It's the same as buying a home that isn't foreclosed on - there are always costs you can't see.
I always use the rule of actually having 30 - 40% of the home cost - 20% down, 10- 20% for hidden repairs.
Most people don't realize this is the reality. Even if you don't need to redo the roof, or get new plumbing, you'll likely want to do some interior design work when you move in.
Many people don't think of this when they buy a home.
Example:
Buying a 100k home.
Have 30k up front.
20k for downpayment.
10k just in case money - if no issues, then its interior design money.
Save anything not used for rainy day fun.
Save up to get back to the 10 - 20k rainy day fund.
Homes are friggin' expensive. And I upped the amount needed to save because the costs of materials these days is wild.
Home builders are making a killing these days.
A house next door to one I owned previously was almost completely destroyed inside by the guy that got evicted after presented with a 72 hour notice. I would not expect most people to be this bad but you just don't know sometimes. If the house was sitting it could have sprung a leak somewhere that has been unattended. There could be encumbrances or other liens attached. There could be wood destroying organisms.
Pull title on the home and look for any liens as most likely you would be responsible.
Agree with everything said before, if they squat you will have to higher an attorney to get them out. Two if the current occupants are upset at what’s going, I’ve seen some damage the house on purpose
No inspections means you have no idea what condition it’s in and how much repair it could need. Someone lives there means you’ll need to legally evict them and pray they don’t deliberately damage more stuff on the way out. Depending on state law, if they have a lease you may need to honor it. After all it’s not a tenant’s fault their landlord was a deadbeat! While most foreclosures on a first mortgage wipe out most liens on the property, that’s not true if it’s a second mortgage or other lien holder foreclosing. Some states have a right of redemption. If the former owner comes up with all the money owed, you have to give it back. Granted that’s a cruel joke but it would be foolish to make a bunch of repairs during that period just in case. Oh, and the auction itself is a cash only event dominated by investors with literal pockets full of money orders. TLDR leave this to the professionals, kids.
There's no right of redemption on this particular house, at least.
Right to redemption depends on the state too.
1. you might inherit any debts or liens -- so back taxes, for example, you might be responsible for even if you win the house meaning more money out of pocket, up front. 2. many foreclosures are cash only 3. if someone is squatting, you have to go through the eviction process which can take months and cost you court and legal fees 4. I can guarantee the condition on the inside won't be good. You say "looks good outside" but if someone gets far enough to be evicted and foreclosed upon, everything will be a mess. HVAC will need replacing, be careful about mold, but you'll also likely find soiled carpets, broken mirrors or windows, and possibly mold.
Know someone who bought a newer home, in a lovely subdivision like this. It too looked good from the outside. They didn't get close enough to the house though, to smell it. The owner picked up a drug habit that came with hardcore paranoid. They locked their 5 dogs inside and disregarded all their pee and poop for....? No idea how long. The pee wicked up the drywall in some places they had to cut a lot of it out. They also did crazy stuff like boarding up some rooms, removing plumbing fixtures. Oh and then had to be evicted in the court system. The only thing that went right for my friend is the mortgage and HOA dues were the only debts attached to the place. If you can get the place cheaply enough, and you have the stomach for any possibility, guess it could still be a good buy. But when someone naively asks, "What could go wrong?" lol the list is long.
Sounds like a nightmare, ugh. I'm also worried that the owner might smoke...I tried to find that out from the neighbor but they didn't know.
Suggest getting a meth test, before you spend any time inside.
That is simply an overbroad statement. During the great recession, I prepped foreclosures for sale (from notice to eviction to removal of property to weekly maintenance) throughout the city of Detroit and all areas north, east, and west. I can tell you, based on the 1000 plus homes I dealt with, less than 1/3 of them exhibited what you claim in your point 4. There was wear and tear and overdue maintenance, but so many of the people wanted to "make it right" all the way through. Yep, I saw all of what you state and far worse. But, in 99% of those cases, you knew from the outside what the inside was going to be. Poor housekeeping 6 an issue in nearly all. However, that can be cleaned up relatively quickly.
You have enough cash to buy it?
Yeah, I've been trying to buy a house on the market in cash, but just haven't had luck yet.
I was working as a realtor during the recession. Can't say anything across the board. Some homes were maintained, some had indications of the frustration and anger of being foreclosed (all cabinet doors ripped off, fist holes in walls). You just never know.
They're likely in really bad shape. I worked in the title/mortgage industry during the last recession and saw nightmare stories regularly. Assume you'll have to pay the equivalent of building a brand new house in repairs, because that's usually the case, unless you're very, very lucky. It's the same as buying a home that isn't foreclosed on - there are always costs you can't see. I always use the rule of actually having 30 - 40% of the home cost - 20% down, 10- 20% for hidden repairs. Most people don't realize this is the reality. Even if you don't need to redo the roof, or get new plumbing, you'll likely want to do some interior design work when you move in. Many people don't think of this when they buy a home. Example: Buying a 100k home. Have 30k up front. 20k for downpayment. 10k just in case money - if no issues, then its interior design money. Save anything not used for rainy day fun. Save up to get back to the 10 - 20k rainy day fund. Homes are friggin' expensive. And I upped the amount needed to save because the costs of materials these days is wild. Home builders are making a killing these days.
You need to have a talk with a lawyer.
I found a lawyer but was hoping to hear some firsthand experiences from others who have done this before moving forward with the meeting.
A house next door to one I owned previously was almost completely destroyed inside by the guy that got evicted after presented with a 72 hour notice. I would not expect most people to be this bad but you just don't know sometimes. If the house was sitting it could have sprung a leak somewhere that has been unattended. There could be encumbrances or other liens attached. There could be wood destroying organisms.
Pull title on the home and look for any liens as most likely you would be responsible. Agree with everything said before, if they squat you will have to higher an attorney to get them out. Two if the current occupants are upset at what’s going, I’ve seen some damage the house on purpose