Posted by Tim (Atlanta) on January 17, 1999 at 20:47:25:
You will need to call the broker listed on the house. He will be glad to show you the house. These houses are most often listed by real estate agents just like any other house. You can make offers, but most often you will need to get your own financing. I recently bought a house that was listed with an agent. It was bank owned (pre Fannie Mae I think). Believe me, these are the best properties to find, the owners (banks) are often very motivated. I have that house under contract at 64% of the listing price, and 70% of FMV.
That having been said, if you are looking at HUD homes, they work differently. These homes can only be bought by investors after they have been on the HUD list for 2 weeks. The lowest HUD will accept is normally 80% of the listing price. HUD also includes its appraised price on the list, but this is often not in touch with reality. I have watched the HUD list religiously for 2 years now, and have noticed only a handfull of bargains in my area.
Is there anyone out there that can explain to me the steps in buying one or more of these homes at the auction. Do you need all cash, or can you arrange for financing in advance. And if so, how do you get a finance company to give you an OK on a house that you dont even have a deal on yet. Most of them want to appraise the house before you will get an answer from them, and appraisals arent cheap. Any info would be greatly appreciated.
Posted by Shelley on January 17, 1999 at 17:51:58:
Greetings from another newbie! I’ve been “lurking” here for a couple of weeks, and really appreciate all of the posts and the info I’m learning from them (and from the other info available on this site)! I found the sites Tim mentioned in his post which list FHA and other government homes available. On the Fannie Mae site, found a home listed which is just a few blocks down the street from us! Drove by and it appears to be empty. Can these properties be bought by investors, or are they only to be owner occupied? What else is involved? From what I read on the site, it listed a price, but said offers can be submitted through the broker named. Can the broker show me inside the home? In general how “open” is Fannie Mae to offers less than what they’ve listed? (I realize this will probably vary depending on the individual circumstances.)
Re: FHA / and other government homes - Posted by Tim (Atlanta)
Posted by Tim (Atlanta) on January 16, 1999 at 13:52:37:
I have been to a couple of HUD auctions, and they only require that you have the earnest money ($500) and a pre-qualifying letter from your lender. Most lenders base the pre-qual letter on your credit and income and do not care so much about the property. Now when it comes time to fund the purchase (closing) then the mortgage company will do an appraisal.
One note : I have noticed that at these auctions, the properties almost always go for much more than they are realistically worth. Be certain that the property will appraise for the price you are bidding. If you cannot close the property, HUD will keep the earnest money. I have watched the HUD and VA list for over two years in the Atlanta area, and have only found two or three bargains (one of which I bought).