Foreclosure properties

[ChuckinVa]

I am looking at a foreclosure property that is listed as a Fannie Mae owned property. has anyone had experience purchasing this type of property and if so, What are things I should be looking out for besides  tax liens? The property appears to be in good condition. We have not been inside and I'm not sure we will be allowed. The property is sold as is. We have driven through the small town and around the neighbor hood. Most of the homes are well cared for and appear to be owner occupied with the exception of the one next door. It appears to be a rental, at least that is my guess. The property is about an hour and 15 minutes from our home and there is a 11,000 acre lake within a few miles which is one reason this appeals to us. I would appreciate hearing any pro's or cons.
Thanks,

[archimedes]

I've never heard of not being able to inspect the inside of a home.   I'd be wary.  But usually with a foreclosure you never know what you're getting anyway because the lender/owner makes no representations about the condition.

It's buyer beware.

[n74tg]

I have bought three foreclosure properties and none had any liens attached.  Two were in Texas and one in Louisiana.  I was able to view all three properties before making an offer on them, however they were sold as-is, in that I would not be able to have power turned on prior to purchase in order to check if appliances worked or not. 

I have positive memories of my foreclosure buying adventures.  I hope it works out well for you too. 

[fishing_guy]

Here in Minnesota, there is the additional problem of frozen/burst pipes.  Not only will they not turn on the power, but usually they won't turn on the water.

Definately buyer beware, but some great deals can be had.

[ChuckinVa]

Well after trying to get in touch with the real estate agent that had the listing I finally talked with him today and he said the property went under contract on Wednesday. He said that the offers are submitted on line directly to the owner ( Bank or Fannie Mae ) and that is why it takes a little while for the information to come back to him. He also said that he offers the foreclosures to his " buyer broker clients " before he posts them and asked If I wanted to sign up with him. I declined for now.
Thanks for your replies.
CHUCK

[poppy]

Not sure if it applies, but I'm going to check into some HUD case properties this week end.

As I understand it, these cases are sold as is and there is some kind of a bidding process.

It either case, I would think that title insurance would be a good idea.

[n74tg]

Don't get discouraged and give up the ghost quite yet.  One of my foreclosure purchases went through the bid process, and no one bid on it because the address was listed wrong on their list.  No one could find it, so no one went to look at it.  My broker called me up and said if I sent in an offer, it would probably be accepted.  I sent in what I thought was a pretty low offer, and yes, it was accepted. 

So, yes, do get on their broker list.  Nothing may come from it, but then again, something might.  And it only takes one good deal, to get you on your way.

Good luck

[ChuckinVa]

Well we found another property near the James River. The house is over 100 years old.We have it under contract for a good price but it has a number of things wrong with it.

We had a home inspector inspect it as the bank wants to sell as is where is and we wanted to make sure we weren't missing anything major. The sale is contingent on the home inspection. The  house has been unoccupied since January which means no heat and the house was not winterized. So when we turned the water on the Quest pipe leaked from the upstairs bathroom into the kitchen. I was expecting this because there was already a hole in the ceiling in two places. So we know it will have to be replumbed.

It has an oil furnace that was installed in 1987 but it fired right up and was drawing well so I believe that is OK. There is no AC. We plan on using window units for now.

There are two leaks in the upstairs bed rooms where it appears the chimney needs to be reflashed.We will have to cover the plaster and holes with sheetrock and tape and mud the ceilings. The walls and ceiling through out most of the house are plaster and lath. The downstairs being the exception as it was flooded back in 1985. at that time the downstairs was gutted and plaster was replaced with sheetrock.

The electrical service is relatively new Square D Qo load center. All of the knob and tube wiring has been replaced. I'm pretty comfortable with the condition of the electrical and I have the expertise to handle that if not. The roof is tin and needs painting.We noticed that the gutters are missing from the house.  The lack of gutters apparently have caused water to enter the crawl space. When the inspector went in to look he found mold on some of the floor joists. He kind of freaked out over that and took a couple of pictures and then didn't want to go back in the house so he wrote his report on the front porch. He told  me that remediation was an expensive proposition and would need to be done buy a professional company. I don't want to take on more than I am capable of but after doing some research online, I think this is something I can handle with the proper equipment and tools. We already know we are going to have to figure out how to keep the water from coming into the crawl space. The inspector said that the gutters need to be a 1/2 moon gutter which again he says is expensive.

I have contacted a company to come out and give an estimate on removing the mold and spraying a preventative treatment.

Has anyone here taken on re-mediating mold from a house? I hate for this to keep us from buying the house as there is so much potential in the house.

[n74tg]

There is lots of info on the internet about mold remediation.  Buildingscience.com has plenty of info on this subject (and others) that I trust. 

When I framed my house, it was maybe 8 months from the time my subfloor went down to when the roof was on and rain would no longer wet the subfloor.  I would estimate my subfloor got wet a dozen times.  I too am over a crawlspace, so yes I got some mold growing down there too.  Like you, I was pretty worried about it.  While in the beginning it was pretty musty down there, and all my nice, clean floor joists now had some black/dark mold stains on them --- now one year later of my crawlspace drying out, all the musty smells have  gone and if memory serves much of the visible appearance of mold has gone too.  I'm not trying to say the problem is solved, but it certainly isn't like it was in the beginning. 

Here are a few things I've learned about mold: Mold exists everywhere (even in the desert), so the correct way to think here is to not provide it an environment where it will grow.  It takes food and moisture for it to grow.  You can't do much about the food part, mold eats most building materials, but it likes paper products (ie the paper coating on sheetrock or wallpaper) the best.  They do have fiberglass covered sheetrock but it is expensive.  Where you can impact mold is in denying it moisture.  If you can keep the relative humidity below 55%, mold goes dormant (ie stops growing).  It's almost impossible to keep the RH inside the house below 55%, but if you seal up the vents in the crawlspace and install a dehumidifier, and most importantly, get rid of all the sources of water leaking into your crawlspace, it's possible.  There is a case study paper on Buildingscience.com showing before and after pics of a problematic moldy crawlspace and it's remediation. Give it a read.

On a different note:  You are looking at foreclosures trying to save money.  If you let them scare you into hiring out your mold remediation (which will be expensive with a capital E) you have given away most of your savings...might as well buy new under those circumstances.  There's enough information available on the internet where you can learn to do the remediation yourself...safely.  Spend the time and learn to do it.  You won't find a better group of folks on any forum to share your problems and ideas with than right here.  John, Glenn, Mountain Don... the list of really knowledgable members is long.   Now, get busy, you've got work to do.

"What one man can do, another man can do."  It may sound kind of corny, but it's true.

Good luck

[cbc58]

you really need to be careful on foreclosure properties and tax lien properties.  as some have said you can get a great deal but also sometimes get burned.  there are lots of people looking at these and don't worry... the banks are sitting on about 7 million foreclosures they have yet to put on the market.  i heard that if you buy 10 properties from fannie or freddie that you can get them at half price.

where are you looking exactly??  is it in va?

[ChuckinVa]

I have looked at several sites on the internet and it really looks like something I can handle. The crawl is pretty tall 3-4 feet in the front and probably 2 feet in the back. I think mold was primarily in one area. From what I have seen the keys are getting rid of the water source. In this case gutters and maybe even a french drain of sorts. Cleaning the wood with soap and water and then treating the area with a proper killing agent. Then treating it with an anti mold product. Drying out the area putting down a vapor barrier. putting in automatic vents and maybe a dehumidifier.

The house is in a small town in Virgina along the James river.

[JRR]

I've bought two HUD properties .... I find HUD as forthright with information as any other group.   Doesn't mean they KNOW everything about a property, but they share what they do know.

TIP: If you haven't used Google Maps for hunting real estate ... you may want too.  I find it a very useful tool.  Just map an area of interest ... go to the "more" roll down on the upper right tool bar .... click on "real estate".  Now you have flags pop up over all the map showing properties for sale ...point and clip on each flag to start the info search ... there is an adjustable filter on the left that allows you to filter by your budget, by foreclosures, etc, etc.  I'm not sure how up to date this info is kept, but it seems to be fair.  Often does not include government properties ... search for them separately on the gov website.  Have fun!

[John Raabe]

If you are looking in areas where Google Earth has run their street view vans down the road you will be able to assess the neighborhood and likely see the outside of the house. These photos aren't necessarily current but they are great for getting a feel for the place.

Example house listed on Realtor.com: http://www.realtor.com/realestateandhomes-detail/16706-N-114Th-Drive_Surprise_AZ_85374_1116224127

Google Earth "street view" bubble from their panoramic camera:



Just copy the address from the Realtor page and paste into Google Earth - it's always fun to zoom around

[bayview]

   A foreclosed property near us finally sold for $70,000 . . .   Previously valued at $110,000.   

   Personally I wouldn't have given anything besides property value.   It was full of mold and rumors of meth production.   The house sat empty for about 14 months with the windows open.   

   More than likely the new owner will band-aid and try to "flip" for a quick sale.   Hope the next potential buyer gets a professional inspection.


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