1 Thought on What are fees to look for when buying a forclosed home?
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    June 29, 2013 at 3:24 am

    In my state, When you are purchasing a home at a foreclosure auction they require $ 5,000 up front as a deposit (refundable if you don’t win the auction) Then once the final bid is made and you win the $ 5,000.00 go’s towards the purchase price. Usually you have 24 hours to give the rest of the money to the bank. Most lenders won’t lend on that short of a notice so make sure you have alot of cash or a hard money lender. Second You may have to pay for title insurance. Many banks don’t like to cover the cost of an owners policy on forclosures. The owners policy’s price will vary depending on the price of the home you want to insure (you can contact a local title company for an estimate) Third be warry at foreclosures. See if all of the liens are taken care of. I’ll give you an example. Say you take out a first mortgage and then a second you default on the first and it get’s foreclosed on by being in second lien position the 2nd mortgage is wiped out. However if it’s the 2nd mortgage that is in default and get’s foreclosed the first mortgage still remains full in effect and now that you are the new owner and the 1st bank didn’t approve the new owner the 1st mortgage is also immediatly due and payable when you take ownership. Also Be warry of any Homeowners association liens and attorney’s liens they are not wiped out in a foreclosure neither are property taxes make sure they are paid. Judgments on the prior owners this varies from state to state but generally any judgments that are caught after the mortgage being foreclosed are wiped out with exception to federal tax liens they are subject to a 180 redemption because they are the IRS and they can do that. Good luck I hope you have fun!!!

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