Have you/would you buy a foreclosure?

[Casha'sMommy]

Anyone here purchase a foreclosure in IL, specifically Chicagoland? Can you point me in the direction of the best information regarding the matter?

TIA ladies!

Cate

[hopefulfaith]

I don't know if this is what you're looking for, but when my dh and I purchased a house a few years ago, we didn't know it was a foreclosure until after we had looked at it and expressed interest in buying it.  We went through a realtor, who was acting as the seller's agent .... only the seller was a bank in California.  We were able to buy the house at a good, reduced price due to the bank wanting to offload it; when we went to see the house and it was vacant, I noticed a scraped-off sticker on the front door.  I asked the realtor if it was a foreclosure and he said yes.  All other details were pretty much the same -- we went through three offer/counteroffers with the bank (they weren't going to give it up for nothing, but we weren't going to buy it without a deal), just like we would have with local sellers -- but I do have to say, it was easier making the offer/counteroffers when I wasn't worried about offending a homeowner or insulting them with a lowball figure; dealing with a bank was far more impersonal.   

[Casha'sMommy]

Thanks for the reply!

I don't honestly know what I'm looking for. lol DH has taken a job in the Chicagoland area and we had originally planned on renting but it's way more than we'd planned on spending. We can afford the area but would prefer to stay under 25% of dh's income for housing cost and the only way I can see to do that would be to buy a foreclosure.

I don't know the correct questions to ask, I have found some useful information online, and you've given me to additional info.

I know we need to be careful that we aren't buying a house with a rood that's caving in, etc however, if we're able to stay under 25% of income then we'd have the money to put towards home improvement if necessary. We're thinking, be prepared to replace carpet and padding, furnace/AC, water heater, that sort of thing. DH has a friend who's a contractor in the area and can get us great prices on things and then help us with the install so that will help with the cost.

I'm just really nervous and want to be sure to cover all my bases on this.

OH! My parents will possibly loan us the entire purchase amount so we can pay cash for the house and the interest will be way less. BIG BONUS! But still nervous.

[JesKace]

Our current house was a foreclosure.  We found out when we came to look at it and the house was in rough shape and we asked questions about why it was such a mess.  Not all houses are like ours though :)  I don't think it was any more difficult to buy this house than it was to buy our last which wasn't a foreclosure.  The selling agent was the one that was acting for the bank, which was located in NY (we're in MA).  I was actually surprised how fast things moved along considering the bank was in another state.  They weren't really willing to bargain too much on purchase price, but we paid what they were asking because at the time they were asking a fair price for the house.  All of the work that needed to be done in the house was cosmetic, which we were wiling to do.  I'm not sure how it is in Chicagoland, but here when you buy a house you have it inspected by a professional and they tell you what kind of work needs to be done to the house and you use that as a bargaining tool as far as how much money comes off the price of the house to fix the things that need fixing.  If you're looking to spend less on a house I definitely think looking into foreclosures is a great idea!  Good luck on the house search :)

[Casha'sMommy]

Thanks!

One of the scary things we may end up doing is purchasing at auction where you don't get to see the house first.

However, the agent we've been talking to has a possibility if the seller is willing to take a considerable amount less (like 50k less) than they're asking under the stipulation that we'll pay cash. *fingers crossed*

Thanks ladies:-)

[goldfinches]

We purchased one that was, I guess, a short sale, although I was young, it was years ago, and we didn't call it that.  We closed on it just a few days before it was repossessed.  We had to work with the seller and their bank or mortgage company.  We submitted an offer through our realtor and waited 3 weeks or so for a reply.

This was in northwest Chicagoland.

The house was a mess.  We had to do the floors, kitchen, baths, basement, yard, basically everything.

When we sold it, 4 or 5 single people bought it, didn't pay a penny to their mortgage company, and it was repossesed again.

What area are you looking in?  I'm a licensed IL realtor, but no longer live in the area.  I can give you a realtor contact in a couple of areas, mainly NW, west and south.  (I can also let you know where to look depending on what you're interested in.)

[pitter_patter]

I purchased a foreclosure in April 2009.  It had been empty for over a year so there was considerable yard maintenance to catch up on,  pounds of dust, rings in the toilets, etc. I recommend getting a very detailed and thorough home inspection.  Some people go a little nutty when they lose their home and they deliberately destroy things.  I've heard of concrete or sand being poured down drains, pipes loosened so water leaks once it is turned back on by the new owner, bolts loosened on decks, etc.  It is worth the cost to have someone check all the major systems, heating, cooling, pool/spa, foundation, roof (actually go up on on the roof),  attic, basement, etc.  Talk to the neighbors if you can, that will give you a sense of who lived there previously and how they felt and reacted about losing their home.

[hopefulfaith]

I forgot to mention, we did have an inspection before we made an offer.  Luckily, nothing was wrong with the house.  We did see a few foreclosure homes where everything that could possibly be taken out of the house, for sale or for spite, was (i.e., trim off of the doorways/floorboards....doors....hinges...etc.).  Ours must have been an amiable foreclosure.  ;)  I am not sure I would support buying a home unseen/uninspected, but we sure did have good luck and get a good deal on ours.

[tracymom1]

My husband is a realtor in Chicago and would be happy to answer any questions that you might have. You could PM me with them and I can pass them along or I could give you his info. You wouldn't have to use him as your agent or anything - no obligations at all. He is just very experienced and would be more than happy to help out a fellow MDC mama by answering some questions - he is very good at honest and direct feedback, and knows the market here very well.

The very best advice I could give to you in regards to moving to Chicago is to FIRST look by neighborhood, not by price!! The areas in the city are vast and varied and carry lots of different characteristics. Some have great school districts, easy access to public transportation, shops and activities nearby, etc... some do not. Like where we live is close to public transportation, but there is nothing nearby to walk to as far as shopping goes. I have to drive to the grocery store and just about everywhere else I want to go. I hate driving but can live with this for now. Our school district is also not the best - I wouldn't send my kids there, but I plan on homeschooling so, really, it is a moot point. Our home was affordable, the area is safe, the neighbors are nice, and we have a huge park 1 block away. I guess the most important thing is to find an area you like and then concentrate on looking for a home there.

Good luck!

[Casha'sMommy]

Thanks so much ladies.

We've had a family emergency so it may be a couple days before I find time for the internet.

Thanks for all your help.

I'll be back asap.

Cate 

[Lucy Alden]

Originally Posted by Casha'sMommy 

One of the scary things we may end up doing is purchasing at auction where you don't get to see the house first.

Oh man, be VERY careful if you go this route.  My ILs bought a home at auction.  They had an agent pull of photos from the previous sale but didn't actually drive by the home and look in the windows.  They were told not to go the house and check it out because it could make the current owner angry and might lead to damage.  When they showed up at the house it had been completely gutted (think wood floors, toilets, light fixtures and tile GONE) and anything not taken was destroyed (drywall had huge holes in it, windows broken).  Even the front door was missing! Needless to say they spent so much time and money getting the house fixed up that not only did they not get a deal but they owe way more than the home is worth.

My BIL also bought a home at auction.  The home wasn't in horrible condition but the owner that was foreclosed on refused to leave.  I think it took a couple of weeks and police involvement to finally get him out.

[tracymom1]

Originally Posted by Lucy Alden 

Originally Posted by Casha'sMommy 

One of the scary things we may end up doing is purchasing at auction where you don't get to see the house first.

Oh man, be VERY careful if you go this route.  My ILs bought a home at auction.  They had an agent pull of photos from the previous sale but didn't actually drive by the home and look in the windows.  They were told not to go the house and check it out because it could make the current owner angry and might lead to damage.  When they showed up at the house it had been completely gutted (think wood floors, toilets, light fixtures and tile GONE) and anything not taken was destroyed (drywall had huge holes in it, windows broken).  Even the front door was missing! Needless to say they spent so much time and money getting the house fixed up that not only did they not get a deal but they owe way more than the home is worth.

My BIL also bought a home at auction.  The home wasn't in horrible condition but the owner that was foreclosed on refused to leave.  I think it took a couple of weeks and police involvement to finally get him out.

This is a good point - and one I should have mentioned. Most forclosures in Chicago are indeed like this (especially single family homes - not so much with condos). They usually take anything worth anything before going - all appliances, anything copper or metal (pipes, for instance) the hot water heater, air conditioning compressor, etc... I mean, some aren't quite that bad, but boy, I would say the majority of them need tens of thousands of dollars worth of work.

[Casha'sMommy]

We have considered the possibility of maybe not being able to move right in and that we may need to get some work done.

I've been looking at some foreclosed homes online as well as some that aren't necessarily foreclosed on but aren't in the best shape and need some work. Our number one goal is to get a deal on the house and keep our monthly housing cost below 25% of dh's income. We're moving to Chicagoland, most likely southwest or western burbs, no matter what we buy because dh's already working up there and is only home a couple days at a time here and there.

I hadn't considered copper pipes missing so that's something to consider.

Thanks for all your input, it's very helpful.

[Lakeeffectsnow]

We bought a house in foreclosure two years ago.  The owners inherited it from a great  aunt or something and were unable to make the mortgage payment due to a divorce (small town, the neighbors gave us the low down).  They just walked away from the house, so there was no vandalism or gutting, but the house was empty for almost a year so there was an infestation of bats in the attic and quite a bit of damage in one of the bedrooms from mice.  One of the bathrooms had water damage from a burst pipe, the garage was missing some roof tiles, the basement steps were rotted, and one of the out buildings had to be torn down.  But, still it was a good deal for us and well below market value.

I did look at some other houses in foreclosure and one still had the kids clothes and toys in their rooms and wedding photos on the wall.  The kids drawings on the fridge door  It was just so sad.  I couldn't bring myself to finish the tour, much less put in an offer.  I felt I would be profiting from someone else's misfortunes. 

Ravi

[goldfinches]

I was in the Plainfield/Joliet area.  I can tell you where to look if that's where you are considering.  I know all the info, like, where not to buy because of delayed taxes.

I also lived in South Elgin, but wasn't a realtor then.  I know a little about that area in terms of house prices and neighborhoods, if you're looking more west.

The metra runs with fewer from the south suburbs, but its a longer drive to get to the stations.

The area is full of foreclosures.  Joliet was in the 10th fastest growing cities in the US recently, or something like that, until the job market slowed down.  So, there are lots of nice houses available for cheap.

[Casha'sMommy]

Originally Posted by goldfinches 

I was in the Plainfield/Joliet area.  I can tell you where to look if that's where you are considering.  I know all the info, like, where not to buy because of delayed taxes.

I also lived in South Elgin, but wasn't a realtor then.  I know a little about that area in terms of house prices and neighborhoods, if you're looking more west.

The metra runs with fewer from the south suburbs, but its a longer drive to get to the stations.

The area is full of foreclosures.  Joliet was in the 10th fastest growing cities in the US recently, or something like that, until the job market slowed down.  So, there are lots of nice houses available for cheap.

All of our family is in the Batavia, South Elgin, Schaumburg area so we're hoping for western burbs not to mention dh's working in Lincolnshire. However, we don't have much to spend hence the foreclosure. We'll be borrowing the entire purchase amount from my parents so we want to buy as cheap as possible (even if that means not being able to live in the house immediately) so we can borrow as little as possible. We're prepared to spend a little money on repairs but we don't have a dollar amount for that yet. We're also prepared to not live in the house immediately but don't have a time frame for that either. We've really only just decided to do this within the last couple of weeks because we have discovered that, unless we live in the ghetto, we cannot save the amount of money we want to each month and rent a house. The ultimate financial goal is to stay within 25% of dh's income on housing cost including taxes.