Buying a house/foreclosure

[KD in CA]

Also, when you buy...get flood insurance (it's cheap, you may not need it, but if you do you'll REALLY need it). And absolutely, no matter what anyone else tells you, get owner's title insurance. Generally it's a good idea (most people think it's a rip-off, but again, it's cheap and when you need it you REALLY need it), but buying a foreclosure, you'd be nuts not to get it - it'll protect you from any "the bank didn't foreclose properly, so the property's still mine" claims down the road.

 

It has never even occurred to me that people would blow off title insurance! Where's the logic in that (x10 for a foreclosure)?!?

 

 

Obviously, a thorough home inspection is critical -- especially heating/cooling system, plumbing/septic, roof, foundation, etc.

[sullim4]

Yeah, most of the advice in this thread is dead on. A few other tips:

 

- FNMA is not likely to negotiate on price all that much. Like someone else said - the property is just a number to them, they have hundreds of thousands of distressed properties, so they really don't deal in the business of arguing down price.

- Make sure you get an inspection contingency, particularly given that this is a foreclosure. The banks have lately been trying to sell properties "AS IS" and have been denying prospective buyers the chance to inspect a house without losing their earnest money. There are ways around this (like having your bank "deny" your loan and thus failing the financing contingency) but don't expect any of them to be easy.

- Someone on this thread suggested looking at land records - this is great advice. Most locales have these online and are pretty easily searchable. These have the potential to give you some great insight into the property and its history (and, perhaps, how responsible/irresponsible the previous owners were).

- http://www.mortgagenewsdaily.com is an excellent resource for monitoring when to lock your rate in.

[DC Tom]

It has never even occurred to me that people would blow off title insurance! Where's the logic in that (x10 for a foreclosure)?!?

 

You can't blow off lender's title insurance, as it's required to protect the mortgage. Most people who know of owner's policies but don't know what they cover think it's a rip-off because some 80% of what you pay for it goes to the title company...and people have absolutey no concept of "Spending X dollars to protect myself from the risk of a 200X dollar loss is a good idea" when someone's making money off it.

 

My wife used to see that all the time. She had one half-assed attorney (buyer) in a condo development advise all the other buyers that owner's title insurance was a rip-off...two years later, the owner of a neighboring building sues because the condo is violating his air rights. Now every condo owner without title insurance is on the hook directly for any judgement that comes out of that (probably in the 5-figures-each range). The three that my wife convinced to actually get owner's title insurance are worry-free.

[/dev/null]

No joy on the house

Has problems with the roof estimated at $15k and bank won't loan

[Jim in Anchorage]

No joy on the house

Has problems with the roof estimated at $15k and bank won't loan

When I bought a Fannie Mae foreclosure the bank made me put $8000 in a escrow account to be used for repairs only with a reinspection a month later. I worked my tail off to make the reinspection date and the guy barely looked at the place, walked around the building in 5 minutes and said "good". Charged me a $100 "reinspection fee".