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Lots of questions about Buying a foreclosure property:

lannypoffolannypoffo
edited December 2007 in Seattle Real Estate
With all this talk about rising foreclosures in the "special" Seattle area, I have lots of questions about buying a foreclosure property. Are there any recommended websites to educate about buying a foreclosure property as a primary residence? Most information I have seen online seems geared toward flippers – not towards someone interested in purchasing a foreclosure as a full time residence. Information that I would like to educate myself on:

REO vs. Foreclosure – Are they different names for the same thing?

Posted "Price" of a foreclosure?
- A foreclosure up for auction? (Is this just the estimated market price? How is this arrived at?) are loans available for auction foreclosure properties?
o Inspecting an auction property – can the property be inspected prior to bidding?
- A foreclosure owned and being sold by a bank/repossessor? Is this the same as a real estate transaction between two individuals - only one individual is the bank?

Additional costs of a foreclosure?
- Tax liens? How do I find out about what additional costs the buyer may be responsible for? (I'm also curious why I as the buyer from the bank/repossessor would be responsible for tax liens - wouldn't the bank/repossessor be responsible for them?)
- Any other "hidden" costs to be aware of? If so how do I find out about them?

Traditional Loans? Are traditional loans available for foreclosure properties? 30 years fixed, etc... Are there any additional loan fees, or different requirements when purchasing a foreclosure property than for a traditional transaction?

Free tools for finding foreclosure properties:
http://www.trulia.com/

Bank specific sites:
http://bankofamerica.reo.com/
http://www.countrywide.com/purchase/f_reo.asp

Finally, are commercial tools & websites worth paying for to find foreclosure properties? Or are they a scam?

Are there any additional questions or area's that someone interested in buying a foreclosure property as a primary residence should research that I have not included above?

Thanks for any info!

Lanny

Comments

  • femtofemto
    A foreclosure is really a process. The end of the process is what's called a "trustee sale" which is an auction that usually takes place someplace silly like the "courthouse steps". At that auction only cash bids are accepted, so only investors who specialize in buying foreclosures typically attend. It is quite common for no one to bid, or for the bids to be too low, in which case the bank will take ownership of the property. Even though no one really bought the property, this is still recorded as a sale with the "price" generally set to the outstanding balance of the loan. At that point the property becomes an REO, since it is now actually owned by the bank. Some banks have so much REO that they are hiring auction companies to unload them. At those auctions usually there is financing available (generally from the bank that's sponsoring the auction). I haven't heard of this happening in Washington yet, but it's becoming more and more common in California and rustbelt states like Ohio and Michigan.
  • Dan C.Dan C.
    Femto,

    Good response. I have seen a number of REO's listed in KingCo on Countrywide and Wells Fargo's REO pages, but I haven't found a listing page for WaMu yet.

    Do you know what local company will be handling REO auctions if they ever happen here in Washington? I have tried a number of searches...and i always end up at $%& RealtyTrac or some other crap.
  • PndscmPndscm
    Holy Cow! Leapin' Lanny Poffo on the Bubble board! Awesome!
  • femtofemto
    Only auction company name I've heard (in the news) is Hudson and Marshall, but there may be some others.
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