OT: Buying a Forclosure

[04fatty]

We've been kicking around the idea of getting a bigger house cause the kids are getting older and we've outgrown this one that we're in. We went and looked at one last night (2 story with 3408 sq. ft. built in 05) that a bank has for sale at $158,000. The tax roles have it valued at $225,000. Other than buying it "as is, no repairs", is there anything to look out for in buying a forclosure? We'd get an inspection done but is there a way to pay property tax on what we paid for it and not what they say it's worth? Will contesting it do any good? What's with the talk about possibly a 4% interest rate coming into effect soon? I'm in Texas by the way. Any advice appreciated.

[markslappey]

Here in So Ga houses are running 100.00 per sq foot -I am a licensed home inspector and recommend you getting one before you buy -the appraiser will tell you how much it is worth -the pest control company will give a clearance letter -it should not have any major problems however I have seen some on houses that are only three or four years old -if it has crawl space I think inspections are more important than if on a slab

[IBARider]

The county I'm in is re-evaluating for tax purposes.  They're keeping the old tax rate until you provide evidence (appraisal) that it is different.  Perhaps your county will do the same.

I just locked in a 5.00% VA loan on a 'short-sale'.  Where I'm at, we're starting to see a lot more pre-approved short sales as the banks are finally learning that they may lose even more going through foreclosure...

Short sales are 'owner' sales for less than they owe the bank. 

[IndyHarley]

I believe regardless of what you pay for it the local government assesor will determine it's fair market vaule and that is what your property taxes will be based upon. At least that is the way it is in most localities.

[V24me]

What's the best way to find these foreclosures?  Do you contact banks yourself or work with someone?

[Ptroc]

You get them at the local court house.  You need to do a title search b/c it may have a lean on it, back taxes, water bill, etc.  In my area, you need to be able to come up with the loot in 10 days.  You can file for an extension but it is only for a few extra weeks.  Something to think about.  When you go to the court house look at Repository sale, Upset Price Sales, and Judicial sales also.  I think it is repository sales that is a straight up auction no reserve.  It is a lot of work.  I have thought about doing this for more rentals but decided to approach the individuals prior to foreclosure and discussing a short sale for the home.  It works out for both the parties.

P

[04fatty]

You can also find them on www.realtor.com. You'll see alot of "short sale" listings and the forclosures you'll recognize by the price. If the house looks priced pretty low check the county tax rolls and if a bank owns it you'll know for sure. That's what we've been doing.

[harborjohn]

Dont forget that buying a forclosure is like buying a car from a auction. Its usually stuff that hasnt been maintained as in poor condition. Not saying its not a great deal but buyer be ware.

[V24me]

Thanks much

[HarleyguyFLHRCI]

We bought the current residence 9 yrs ago as a HUD foreclosure. I didn't realize at the time that the situation was a harbinger of our current economic state. A single mom couldn't come up with a down payment, so they gave her a 2nd mortgage to buy the place. It didn't take long to become delinquent. Place was 10 yr old when we moved in. Of course, when when you can't pay your mortgage, you don't perform any maintainance or repairs. HUD would not insure the place, so we went with a conventional mortgage. Ran into a catch 22 with repairs - lender wanted them done before closing, HUD wouldn't allow any repairs as long as they still owned it. Lender finally gave 30 days after close to certify repairs were done. I've done a lot of landscaping and upgrades, including a 700sf garage, kitchen remodel, bamboo flooring going down next month, but I've loved every minute of it! Plus, even with the depressed housing market, we're still up by 75% over what we paid.

[yobtaf99]

Whenever buying a foreclosure, pay the piper (a reputable title company) and do a title search on the house before you close.  Sometimes those second (and third) mortgages will mysteriously appear out of nowhere.  You don't want anyone else unknowingly having a lein on your new home.

Property appraisals, and thus taxes, are set by the local govt, and are triggered by sale prices, not appraised values.  It wont do any good to have it appraised.  They will go by the sale as recorded in the official records.  You may be able to get it re-evaluated and lowered AFTER you buy it, but nothing's going to happen in time before you close on it.  That's a project, like homestead exemption, to get on soon after you get settled in.

[June2017]

I bought a Forclosure December 2007.  The house was "assessed" by the county for $530,000, and I bought for $370,00.  Well,......when we bought it at $370,000, we knew that we were pretty much buying at market value, so of course I called the county about their assessment which in turn had me paying alot more taxes then I should have been paying.  They said they would not change things until the county came up for new assessments, and that all took place back in October. 

I appealed the assesment and won,......and the took the value down to $438,000.  Sure,.....not bad but not good enough.  So I called them up when I received this new assesment and said I wanted to appeal the appeal and they remembered me because of all the crap I took with me and 2 weeks later I received a new assessment of $401,000   Won again !

Do your homework, and you should be able to win.  Now the appeal boards will try to BS you and say that they do not take Forclusure property values as true Market Value but that BS !  When a forclosure go's to closing,....it THEN becomes True Market Value.  It's legit, and I proved it during my appeal.  A guy that works for me bought the same exact house in another community by the same builder (brand new home), and when his house was appraised just prior to closing, MY FORCLOSURE HOUSE was used as a comp.  That right there proves beyond a reasonable doubt that they are TRUE MARKET VALUE !   

[04fatty]

Thanks for that RoadGlide, That's encouraging! The extra taxes they say I'd owe are what are bothering me. The way I look at it, If I am a willing buyer at a certain price and the seller sells willingly at that price, then that's what it's actually worth and should be taxed at. Not at the overinflated county appraisal figure. I've called the county twice now and they won't return my calls to even discuss before we buy one. I'll just have to contest it.

[DaleW]

As an interested onlooker,what kind of sales tax are you up for on property?

Dale

[Phu Cat]

Yobta is dead on regarding the title search.  Don't depend on the one the bank does as it only protects the bank, not you.  Pay for one directly.  If done when the one for the bank is done it's much cheaper.

PC

[June2017]

Property tax here where I live is 52.5 cents per $100.00

Is that what you were asking about ? 

[truck]

Property tax here where I live is 52.5 cents per $100.00

Is that what you were asking about ? 

Ouch!