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| Be the hit of your next party! Buy Sam's Magic ebook |
| FORECLOSED HOME INFO We offer this information to you for FREE. Donations to help keep the site alive are appreciated. If you would like to make a donation, click the button below. Thanks! |
We recently purchased a foreclosed home in Indiana, and we are enjoying a mortgage-free lifestyle. In the spirit of helping others, as inspired by
our new President, we've decided to share what we learned with you. There are websites that charge to tell you where to find foreclosed homes,
government seized property and surplus, but it's all out there for free if you know where to look! We decided to share this information in hopes that
others might also experience the joy of owning your own home with little or no mortgage. If you would like to make a voluntary donation to help keep
this site running, please click the button above, and we thank you. If you can't donate, no problem. You have full access to all this information for
free. Just promise to help someone else when you can!
Yes, you do need money on hand to buy a home for cash, but it could be the last house payment you ever make! That's a major incentive to find a
way to raise some honest cash. Do you have something to sell? We decided we didn't need two vehicles. We sold a car for $5000 and started
searching the HUD listings. We found this house, put in a bid for $4600 and got it! We sold some collectibles to pay for renovations. When your
goal is to own a home with no payments, it's amazing where you can find money. We figured once we starting living rent/mortgage-free, we could
easily afford to replace that car later. Honestly, we're doing just fine without it, and we're saving even more money on insurance and maintenance.
If you do need to take out a loan for a bargain house, take the shortest term loan you can afford, and your home will be paid off before you know it.
No matter where you search, there are things you MUST do:
1. Ask if there are liens, back taxes, code violations or any other expenses associated with the property. These expenses stay with the
property and will transfer to the new owner. The county recorder's office should either have these answers or tell you where to find them.
2. Ask the seller if the house is an occupied rental home. Tenant rights are protected. They can stay in the home until their lease expires.
3. Consider why it's so cheap. Many dirt cheap homes are dirt cheap for a good reason. Sometimes, a home needs extensive repairs. In many
cases, the cost of the repairs plus the house is still quite a steal, but you need to see the property and do the math. It is never a good idea to buy a
house sight unseen. Before you get excited when you see a home listed for $100 cash (yes, they exist), find out why. Lots of repossessed homes
have fire damage (go figure). Others are in drug-infested war zones! Some have code violations or back taxes past due. Just because the list
price is low, that doesn't make a house a good investment. Local police can tell you about crime in the area. No matter how much you improve a
house, you can do little to improve a neighborhood. So before you jump into a hundred dollar home, remember you might end up in the same
situation as the banks. You could discover it's not fit to live in, and you'll be stuck with it and all the property taxes and expenses that come with it.
There is very little chance you're going to unload it in today's market!
4. Shop around - there are diamonds out there! And please read the info below before diving into HUD searches. You'll be glad you did.
our new President, we've decided to share what we learned with you. There are websites that charge to tell you where to find foreclosed homes,
government seized property and surplus, but it's all out there for free if you know where to look! We decided to share this information in hopes that
others might also experience the joy of owning your own home with little or no mortgage. If you would like to make a voluntary donation to help keep
this site running, please click the button above, and we thank you. If you can't donate, no problem. You have full access to all this information for
free. Just promise to help someone else when you can!
Yes, you do need money on hand to buy a home for cash, but it could be the last house payment you ever make! That's a major incentive to find a
way to raise some honest cash. Do you have something to sell? We decided we didn't need two vehicles. We sold a car for $5000 and started
searching the HUD listings. We found this house, put in a bid for $4600 and got it! We sold some collectibles to pay for renovations. When your
goal is to own a home with no payments, it's amazing where you can find money. We figured once we starting living rent/mortgage-free, we could
easily afford to replace that car later. Honestly, we're doing just fine without it, and we're saving even more money on insurance and maintenance.
If you do need to take out a loan for a bargain house, take the shortest term loan you can afford, and your home will be paid off before you know it.
No matter where you search, there are things you MUST do:
1. Ask if there are liens, back taxes, code violations or any other expenses associated with the property. These expenses stay with the
property and will transfer to the new owner. The county recorder's office should either have these answers or tell you where to find them.
2. Ask the seller if the house is an occupied rental home. Tenant rights are protected. They can stay in the home until their lease expires.
3. Consider why it's so cheap. Many dirt cheap homes are dirt cheap for a good reason. Sometimes, a home needs extensive repairs. In many
cases, the cost of the repairs plus the house is still quite a steal, but you need to see the property and do the math. It is never a good idea to buy a
house sight unseen. Before you get excited when you see a home listed for $100 cash (yes, they exist), find out why. Lots of repossessed homes
have fire damage (go figure). Others are in drug-infested war zones! Some have code violations or back taxes past due. Just because the list
price is low, that doesn't make a house a good investment. Local police can tell you about crime in the area. No matter how much you improve a
house, you can do little to improve a neighborhood. So before you jump into a hundred dollar home, remember you might end up in the same
situation as the banks. You could discover it's not fit to live in, and you'll be stuck with it and all the property taxes and expenses that come with it.
There is very little chance you're going to unload it in today's market!
4. Shop around - there are diamonds out there! And please read the info below before diving into HUD searches. You'll be glad you did.
BANK-OWNED PROPERTY Not all repo'd homes are HUD homes. Many of the foreclosures out there are the result of defaults on loans that were
not FHA insured. Those don't go into the government's hands; they become the property of the bank. Banks don't like owning property, because it
costs them money. However, they are overwhelmed. They claim they are listing these homes with realtors as quickly as they can, but not all are
listed yet. Some can only be found on the websites of lending institutions. We've got links for you on our Property Search Page.
Many of these properties are listed with realtors, and they can easily be found online with a simple search through a website like realtor.com. Enter
the city and state where you want to search and your price range; for example enter 0 to $10,000. They'll be listed like any other home for sale. If a
property comes up for $0, it is likely scheduled for auction. (See the section below to learn about auction homes.)
Keep in mind, not all areas of the country have been hit hard with foreclosures. Many areas will turn up nothing in this price range. Areas like
Detroit will bring up a shocking number of homes. There are hundreds of listings in Detroit right now for under $1000; some for under $100.
However, be warned! Most homes in this range have fire damage. It's amazing how many fires break out when homes are repossessed. They
may also come with a large bill for back taxes, and some have a requirement that you put money in escrow to prove you can afford necessary
repairs. There are some fantastic deals out there; just be cautious and shop smart.
not FHA insured. Those don't go into the government's hands; they become the property of the bank. Banks don't like owning property, because it
costs them money. However, they are overwhelmed. They claim they are listing these homes with realtors as quickly as they can, but not all are
listed yet. Some can only be found on the websites of lending institutions. We've got links for you on our Property Search Page.
Many of these properties are listed with realtors, and they can easily be found online with a simple search through a website like realtor.com. Enter
the city and state where you want to search and your price range; for example enter 0 to $10,000. They'll be listed like any other home for sale. If a
property comes up for $0, it is likely scheduled for auction. (See the section below to learn about auction homes.)
Keep in mind, not all areas of the country have been hit hard with foreclosures. Many areas will turn up nothing in this price range. Areas like
Detroit will bring up a shocking number of homes. There are hundreds of listings in Detroit right now for under $1000; some for under $100.
However, be warned! Most homes in this range have fire damage. It's amazing how many fires break out when homes are repossessed. They
may also come with a large bill for back taxes, and some have a requirement that you put money in escrow to prove you can afford necessary
repairs. There are some fantastic deals out there; just be cautious and shop smart.
| AUCTIONS Auctions are GREAT places to find bargain property; not only through local auction houses, but also through government sales. If property taxes aren't paid, the county will seize the property and auction it to cover the amount due. Many of the larger counties have regularly scheduled auctions for what is commonly referred to as "Sheriff's Sales." Notices will appear in your local newspaper in the classified section for legal notices. You can also call your local sheriff's office or county recorder's office and ask for info. Many areas post these online, so just do a web search for sheriff sales in your county. For example, in our area, we find them by searching for "allen county sheriff sales." Viola! There is a link to take us right to the site that lists homes on the county's auction block. Many of these are sealed bid auctions, which means there won't be a room full of people yelling out numbers. You complete a form and write in your bid without knowing what others are bidding. The auction might be open for several days so people can drop off their sealed bids at their convenience. When the auction closes, the highest bidder wins. If you've never been to an auction before, be aware that a bid is a binding, legal obligation to pay that amount, if you are the highest bidder. If you need to borrow money from a bank, you must have already gained approval from the bank to cover the bid. Bottom line - if you don't have the cash on hand or an agreement from your bank to cover the amount of your bid, DON'T BID! Another great bargain source is local auction houses. They are easy to find on the web or in your local phone book. Most of these will be estate auctions, which are often very good deals on houses in good shape. Don't feel weird about buying from estates. The family needs the money, or they wouldn't be selling the house. Your bid helps them. Preview dates will likely be scheduled, so you can see the house before the auction and look for things that might need repairs. You probably won't have a chance to do a complete inspection before bidding, so if you don't know much about home repair, you might want to bring someone with you who can spot warning signs. There are a couple of auction terms that might help you find the real bargains. Some have reserves. That means there is a fixed minimum dollar amount the owner is willing to accept. The reserve amount will not be revealed before bidding begins. If reserve is not reached by bidders, the home will not be sold. They might try conventional real estate listings or try to auction it again another day. If you are looking for bargains, the term you want to find is "absolute." If you see a auction that says a home will be "sold absolute," it will be sold regardless of price. Most auctions come with the disclaimer that the owner has final say in whether or not the property is sold, but most absolute auctions really are sold to the highest bidder. I have seen homes sell for $2000 in absolute auctions; especially when there are several properties on the block at the same auction. Granted, these homes likely need repairs, but many of them sell far below their value, even considering the cost of repairs. Read the terms of the auction before bidding. Most require the winning bidder to leave a minimum down payment, usually 10% to 15%, at the end of the auction. The entire balance will be due at closing, which varies greatly, but it is usually 30-60 days from the date of the auction. Ask if you or the owner will pay closing costs and how much the buyer's premium will be. That's the commission for the auctioneer, and the buyer usually has to pay it. Auctioneers are very good about explaining all this before the auction starts, but don't be afraid to ask if you are unclear about anything. It's a good idea to attend a "practice" auction, just to see how it works. You'll find that it's really not that complicated. If you are confused about anything, just take notes and talk to the folks running the auctions afterwards. People in this field are generally very helpful, fun-loving people. They are happy to help you. Once you understand the terminology and get the hang of it, auctions are loads of fun! You might find yourselves addicted to bargain hunting at auctions, like we are. Always ask if there are liens, back taxes, code violations or any other expenses associated with the property. |
| HUD HOMES What the heck is HUD, anyway? HUD is the U.S. Dept. of Housing and Urban Development. One of its branches, the Federal Housing Authority (FHA), offers mortgage insurance to banks. Banks can offer FHA home loans to qualified buyers. If a person defaults on a FHA loan, the home is foreclosed. FHA pays the bank and takes the property. HUD then sells the home to recoup the money on the defaulted loan. HUD has a website, but it is very confusing and redirects you to other sites that vary state to state. Frankly, it sucks! So we've put together links to take you directly to HUD listings for each state on our Property Search Page. When you find a home and you want to place a bid, you must do so through a realtor. Any realtor can show you a HUD home, but it is very important to find one with HUD experience. This can save you loads of time and money. You need someone who understand the system and knows how to navigate through the red tape. Call several real estate agents and ask if they are experienced with HUD homes. If they answer in general terms and claim it's like any other sale, cross them off and call the next agent on the list. There is usually at least one agency in town that specializes in HUD and handles HUD closings, and that's who you want. Things You Need to Know About HUD Listings 1. Watch for escrow amounts! HUD homes are inspected, and anything that needs to be repaired is described in the listing. Look below the description box, and you will see what repairs are required and how much they will likely cost. You will be required to have that amount money in an escrow account to prove you can afford to fix the problems. Sometimes, no repairs are necessary, so you don't have to worry about this at all. It could be just as simple as repairing a hole in a wall, and the escrow amount is negligible. However, remember to check this in every listing so you don't overlook something big like a bad roof that requires $3000 in escrow. You need to consider that plus the price of the house before bidding. 2. Read the inspection report. If you find a house you like, it is a good idea to read the inspection report to get more familiar with the house. You will learn not only about the heating and plumbing, but you'll also learn what appliances and extras are in the house. You can also see if things passed inspection but were given marginal ratings. This can be a warning sign of problems that may not need immediate repairs, but they are likely coming soon. Also keep in mind that these inspections are done when the house is foreclosed. Months can pass, and a lot can happen during that time when a house sits empty. Pipes can freeze, vandals can cause problems. It is always a good idea to get your own inspection before you commit. In some cases when the price is right, people don't care about getting a new inspection before they bid. If you're buying a house for $1000, you may not care if major repairs will be needed down the road. It's advisable to get an inspection, but it's your call. 3. Read the lead paint report. Most homes built before 1960 likely contain lead paint, and homes built up to 1978 could. Most HUD homes are inspected for lead paint, and detailed reports are provided. It is a good idea to look at this report before bidding. Lead paint is a serious problem, especially if you have kids. It is VERY important to learn where lead might be hiding before doing renovations. Before you start sanding, grinding or doing anything that could kick up dust or disturb a painted surface, you need to know if that paint is lead based. You can make yourself or your family very sick (or worse) if you don't take proper precautions. So read that lead paint report! You may also find additional pictures of the interior of the house in that report, too, for a sneak peek before you trek out to see it! Speaking of Lead Paint: There are options available for dealing with lead paint. We can't recommend you take on this challenge yourself - there are real health risks involved. Sometimes, professional lead paint abatement is absolutely necessary. Sometimes, the solution might be as simple as using an encapsulate like LeadStop, which is easy to use. PeelAway7 can strip lead paint, but WHOA is it nasty! It is corrosive, and the instructions don't tell you how much it can run and puddle on the floor. It is vital that you read all the safety information and make sure you abide by federal, state and local laws. Also, please utilize local household hazardous waste collection sites for any debris. Learning about lead paint is the key to making the right decision; thus protecting your family. HUD offers information about lead paint on this site. |
| Helpful Tips and Important Information About Foreclosed Homes |