Loans Answers

Can one buy when a house is listed to be sold on the courthouse steps?

Question: When buying foreclosed houses, is it possible to approach the home-owner when the house is currently listed in the legal organ to be sold on the courthouse steps? A friend and I have been reading and wanting to do the “buy a house at foreclosure, and through sweat equity, sell it and make enough to restart the process” deal.

So far, we have just talked and looked in our area. I had a friend who is a real-estate agent send me some listings, but they were always of houses that were already rehabbed. We want to get them before they get to that state. Any ideas how to do this?

Currently, there is a house in our subdivision that will be sold this Tuesday (6/6) on the courthouse steps. The outstanding balance is at least 200K below the FMV for our area. So, my question is, are we “allowed” legally, to approach the owners about buying the house prior to the sale, or do we have to wait until Tuesday?

It would seem to be in the owners best interest to sell the house before Tuesday; but then again, they only owe 318K on a house with a FMV of 550+, so it would seem strange that they didn’t try to sell it themselves for the amount owed, just to avoid the credit report hit.

Needless to say, we are both very much newbies, who think we can do this because we’ve bought and sold several our own personal houses that our families have lived in through the years. We’ve both worked hard when necessary in the past to fix old houses, so we are not afraid of doing that again.

Next question – does anyone use or can recommend any of the foreclosure listing services such as foreclosures.com, realtytrac.com and others like these?

Last question – should we just bag the entire foreclosure idea and buy HUD or VA homes? The above mentioned house is probably twice the price of what we want to pay for our regular houses – we just thought this would be an awesome opportunity to make an obscene amount of money in a short time. (This subdivision usually sells by word of mouth before houses come onto the market – so we’re not really worried about having to sit on it for any length of time).

Absolutely the last question – would y’all recommend we use investor financing or our own money when we buy houses? I mean, should we use our personal home equity lines of credit, or take out investor grade home loans? Again, we are confining our search to our one zipcode, so we are confident in the timely selling of the houses, so we are thinking interest rate won’t be a big deal for us.

Of course, after saying all of this – y’all might think we are two of the craziest people on earth, and don’t belong anywhere near a checkbook or house sale! Seriously though, we do want to proceed cautiously, and any advice we get will be gratefully accepted.

Answer: Yes, you can legally purchase property just before the foreclosure.

No, I haven’t found a tracking service that I think is good, but they may be out there. Most professionals just use the legal ads.

No, buying foreclusures from VA/HUD is pretty much a retail purchase but without a lot of the protections one gets when normally purchasing retail.

Always use other people’s money if you can do it.

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