Foreclosure - house next door
Good morning, BP. I have a question on a foreclosure that is scheduled for auction on the courthouse steps in November. We are in a bit of unique position (I think) because the property in question is the house next door to us. There are only 42 homes in our neighborhood, all built around the same time. We have lived in the neighborhood since the year all the homes were built, so we have been able to keep a close watch on sales (we actually have had several this year), rents, etc. We are very comfortable with our estimate of the FMV of this home, and with the rent amount that it would command.
Additionally, before the homeowner was served a notice of foreclosure, we actually got to see the house with our agent. It had been on the market since March, with the price gradually dropping to a point where we became interested in making an offer. After we saw the house, we asked our agent to write up an offer, only to find out the seller had already accepted an offer (well below what she owes on the house - I'm assuming she was starting the process of short sale). Within a few days of finding this out, I discovered that a notice of foreclosure had been served.
We are aware of external repairs needed on the house (some of the same things we have had to do in the last few years - woodwork needing to be replaced, etc). The interior definitely needs revamping (carpet, paint) but there were no major visible defects when we saw it, other than the fact that it was filthy and hadn't been maintained well. Of course, the big unknown is what an inspection would reveal.
Anyway, the starting bid on the house is $110K. We believe on the low end, the FMV of the home is $180K and that is a very conservative estimate (3 sales have been above $200K this year, although these homes were a few hundred square feet larger). We would budget around $30K for repairs, knowing that this is high for the visible work needed but allowing for unknowns.
I have done a preliminary search for liens and did discover a FIFA lien from 2011. We would do a title search before going to auction to make sure we understand the full scope of any liens against the property. We know there are no HOA liens, as our HOA is defunct as of about 8 years ago and only solicits voluntary donations.
Our neighborhood is well-maintained (this one is the eyesore on our street) so I feel confident about investing here.
One negative - as far as we know, the neighbor is still living in the house with her daughter. As of a month ago (when we saw the house) there were boxes packed, giving the impression that she was making plans to move. But obviously, evicting a neighbor would be extremely unpleasant and not something we would ideally want to do.
So, given this information (sorry for the length of it), does it seem like we have enough information to move forward (obviously, the title search would be key)? Oh, and our max bid would $120K. If we were able to get it for this amount, does this seem like a good deal?