Flipper/Rehabber · Temecula, CA · Member since 2018 · 18 posts · 3 votes
Let me start with saying I'm really enjoying all the helpful information out in BiggerPockets land. I was wondering what costs are associated with buying a house in pre-foreclosure vs a house not in pre-foreclosure. If I'm buying the home, do I become responsible for the seller's default amount? Taxes? What other considerations am I missing?
Let me start with saying I'm really enjoying all the helpful information out in BiggerPockets land. I was wondering what costs are associated with buying a house in pre-foreclosure vs a house not in pre-foreclosure. If I'm buying the home, do I become responsible for the seller's default amount? Taxes? What other considerations am I missing?
Buying a house in pre-foreclosure is tricky depending on the state you live in. In a couple of states it is actually illegal to solicit people who are in pre-foreclosure or in the foreclosure process. Ask a real estate attorney for the state you are considering.
Let me start with saying I'm really enjoying all the helpful information out in BiggerPockets land. I was wondering what costs are associated with buying a house in pre-foreclosure vs a house not in pre-foreclosure. If I'm buying the home, do I become responsible for the seller's default amount? Taxes? What other considerations am I missing?
Buying a house in pre-foreclosure is tricky depending on the state you live in. In a couple of states it is actually illegal to solicit people who are in pre-foreclosure or in the foreclosure process. Ask a real estate attorney for the state you are considering.
Flipper/Rehabber · Temecula, CA · Member since 2018 · 18 posts · 3 votes
7y
@Account Closed Thanks!
I'm planning on flipping in California. Had not heard that we'd be responsible for unpaid bills too... interesting. Certainly the principal on any loans, arrears (my boys would laugh at this... I kind of giggled truth be told), liens and money to the seller make sense. The rest seem like the usual fees/costs of buying and rehabbing. What do you mean by pre-paids? A lawyer is sounding more and more like a cost of business at this point
Flipper/Rehabber · Temecula, CA · Member since 2018 · 18 posts · 3 votes
7y
For those counting in California (Riverside County at least), we would not be responsible for any utility bills that are unpaid prior to our assuming ownership unless there was a lien placed by the utilities on the title, in which case that would have to be cleared. Interesting...
I'm planning on flipping in California. Had not heard that we'd be responsible for unpaid bills too... interesting. Certainly the principal on any loans, arrears (my boys would laugh at this... I kind of giggled truth be told), liens and money to the seller make sense. The rest seem like the usual fees/costs of buying and rehabbing. What do you mean by pre-paids? A lawyer is sounding more and more like a cost of business at this point
If you use Hard Money you have your amount down, points, pre-paids (tax and insurance going forward), an appraisal, an inspection, their "junk fees", carrying costs and on and on. If you use your own cash you have risk but fewer fees.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
The costs are Exactly the same as buying any other property.....all debts and liens need to be paid off at closing along with your normal closing costs. The rub comes in when the the seller owes More than what you are willing to pay for it.
The costs are Exactly the same as buying any other property.....all debts and liens need to be paid off at closing along with your normal closing costs. The rub comes in when the the seller owes More than what you are willing to pay for it.
I suppose I should clarify. In researching a property from afar, I'm coming up with things like amount of default and wasn't sure whether the seller or I were responsible for that from the drop. Or would it be something I would offer to the seller to take care of, or ??? I've seen liens and what have you and know we'd be responsible for clearing the title. Just wrapping my head around the, for lack of a better term, mechanics of it all. I imagine once I'm actually talking to the seller and delving deeper into a title search with my title company, I'd know the particular numbers for the deal, but trying to judge if I should even get to that point.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
7y
@Ricky Knack Well, Someone is responsible for it.....typically your purchase price is enough to pay off All outstanding debts, and they simply paid from the seller’s proceeds at closing. There are some circumstances where you could Willingly assume some particular debt, above and beyond the purchase price, if you thought you could perhaps negotiate it lower, after closing......but you normally pay just the purchase price along with some closing costs.
But to your original question, buying a preforeclosure is the same as buying as any other house, cost and procedure wise.