Buying a quick sale preforeclosure..?

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My husband and I just got pre-approved for a mortgage loan about two months ago and we have been frantically searching ever since. A couple weeks ago I caught word that a house in the town we are looking in is going into foreclosure in the near future. So I looked up some stuff online and it turns out that the homeowner had just lost their court case against their mortgage company on 7/27/09. So thinking that they might be accepting offers for a quick sale prior to foreclosure, we went over and asked them about it personally. They said that they had some things to mow over the next two weeks but that we were the first people they would contact.

I checked out some public records regarding the house and it looks like they had purchased the house for $ 89,000 in ’99 when it was appraised for $ 112,000, and they currently have $ 70,000 left on the mortgage. However, since they had purchased it, she admitted that she had tried to start projects, such as redoing the kitchen flooring, and then stopped midway through and on numerous occasions called it a “fixer upper”. So it sounds like she hasn’t made any improvements, and if anything, has only brought the value down.

I know there are many factors that go into this, but since we will not be going through realtors if we do get the call back, what would be a rough estimate on an offer. I am currently a nursing student and my husband is still working his way up in his company and so as much as I would like to give her a high offer given her unfortunate situation, we really aren’t in the position to at this point, especially if it needs some repairs.

We are new to all of this, and would just like some insight from someone who has had some experience with quick sale foreclosures.

Thanks!
I was thinking the same thing about them not having the right to sell the property at this point. However, she stated that they gave her three options at this point, one of which was to sell the property herself.

Ive got a few questions about the 1st time home buyer tax credit, and I can’t seem to find the correct answer online.

I bought a house in july of 09, But I did not get a mortgage or loan for the house, It was paid for with cash. Does that matter? Will I still get the first time home buyer tax credit?

Next question: This one sound stupid, but ive ready conflicting facts posted on the the IRS page.
I bought a house in 2002 with cash, I sold it for a loss this year in june. In july I bought a new house with cash. So Im not really a 1st time home owner. BUT when the tax credit first came out, I read that the 1st time homeowner credit will apply to people who have not bought a house in the last 3 years (2006,2007,2008) , and bought a house in 2009. And If I remember right their was rules about if it was you primary residence. And in my case it was my primary residence.

SO to sum up my questions: If you pay cash for a house in 2009 will you still qualify for the 1st time home buyer tax credit? And If you bought a house in 2002 and sold it in 2009, and bought another house can you still qualify for the 1st time home owner tax credit?

Please only answer if you know the correct answer, And please don’t leave answers empty by only saying “NO” or “YES”
Thanks for your time!

5 Comments
  1. Reply
    the eyes have it!
    April 29, 2011 at 9:04 pm

    if they already lost the case the house doesn’t even belong to them. it now belongs back to the bank. if you had gotten a hold of them BEFORE it was finalized, then an offer to them could be made. now you have to deal with the bank. if it is still in the court process, then they still own the home. but, if they lost, they have no more say so. please believe me when i say she’s wrong. my house was in the same situation. i know from experience. she’s right about it being an option, but that was before she lost her home. now it’s a moot point. i’m sure she has a certain amount of time before she’s evicted. let it go on the market and then make a low offer for it. just be patient

  2. Reply
    Captain Tenneal
    April 29, 2011 at 10:00 pm

    Ask the homeowner is they would allow you to have the house appraised. If not then you could still do a driveby appraisal. That is where the appraiser does not enter the house but gets info from the township assessor as to size etc. Let the appraiser who knows your market give you some guidance based on current market conditions as well as the condition of the house as you know it. It will be money well spent.

  3. Reply
    chatsplas
    April 29, 2011 at 10:46 pm

    You need much patience and perseverance to close on this. You need to know value of comparable homes in area, how long homes are remaining on market, and selling prices. Do your research. You are focussing on and researching irrelevant things such as what seller paid for house back when. Importance is value NOW. GET an attorney to draw up your offer and guide you through this.

    Seller is trying to sell home but its value has dropped, perhaps to less than mortgage amount, so lender approval is required.
    Lenders want to get 75-90% of home’s FMV, so depends on where list price falls in this scenario.
    FMV and comps are MORE important than asking price, so do your homework, look at comps.
    Banks make decisions by committee, slowly and not always in their own best interests. They often create delays and problems along the way. If these sellers are doing short sale, lenders approval is required. So if you offer enough that it is NOT a short sale, you have onnly to deal with sellers, not their lenders.

  4. Reply
    David Z
    April 29, 2011 at 11:40 pm

    because you owned a principal residence in last 3 years you do not qualify.

    had you sold that home in July of 2006 and rented since then, well then you would qualify.

  5. Reply
    Janet P
    April 29, 2011 at 11:53 pm

    You do not qualify for any credit at all. The tax code does not read “can not have bought for 3 years”, it is “can not have owned”. You owned property, you do not qualify.

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