Home auctions

[unbibium]

I'm seeing a lot of ads for foreclosure sales and auctions on the TV and radio.

My skeptic fu is weak in this regard. And I'm eager to get out of apartment life. But there are a few reasons I'm not buying into it hook, line and sinker:

• I know that they're buying commercial time, so it follows that somebody's expecting to make a profit by making me call that 800 number.
• I also figured that there were enough people out there whose literal job is to just hunt down, buy, and flip foreclosed homes. And I'd be competing against them with no experience.
• Buying any home sight unseen gives the risk of maintenance problem. Buying a foreclosed house gives the added risk of a house with every window broken, the toilets and refrigerator removed, and the interior walls all spray-painted with "FUCK YOU COUNTRYWIDE".

But, a bunch of emergency expenses and the recent stock crash have recently decimated my savings, during the one year I expected to save money faster than the housing prices were going up. So if 2008 is providing some unique opportunity to get into home ownership, I'd like to hear it from someone who knows a little more about what they're talking about.

Comments

[cheryln.livejournal.com]

I don't know if it's "unique," but I don't think it's a bad time for someone with decent credit. If you don't have much savings, it's going to be tougher to get creative options for a down payment (for example, my own mortgage is financed partially with a home equity line of credit piggybacked onto the primary mortgage instead of a cash down payment, but the total of both loans was well below our planned borrowing). But on the plus side(s), there are always programs out there for first-time homebuyers or particular income ranges or purchases in particular neighborhoods, and interest rates on fixed loans are coming way down again. And it's also true that foreclosures have generated a lot of "motivated sellers," but along with that an industry to prey on them and on people thinking they can get rich quick off them.

It's probably worth, if you're serious about it, talking to a broker and/or your bank to get a realistic sense of your price range and what's out there in it. Get a price range and then spend a Sunday afternoon going to open houses, and go from there.

[kerri9494.livejournal.com]

You will probably be willing to pay more than most random flippers for a house. You're looking for a place to live, which doesn't have to be perfect, it just has to be affordable...and you can fix it up as you go along. They, on the other hand, want something that's BARGAIN BASEMENT, so the profit margin is higher.

[halfabee.livejournal.com]

Yes, there are be some bargains out there, but there are just as many "too good to be true" "opportunities".

I'd say start with the traditional house buying research. Find out what you can afford (not just what the banks think you can), i.e. how much $$ you can commit to paying a mortgage, how much you have on hand for a downpayment, and don't forget to leave $$ for closing / moving / furnishing costs and ongoing upkeep.

Then see what's available in new developments. I always recommend starting new because there's a finite number of new developments, with a finite number of floorplans. Then check out the resale market where every house is unique, and finally the foreclosure market.