Help me noodle this foreclosure

Dixie · Dixie's Garage

Can anyone tell me if I have this figured right?

The bank foreclosed on the house across the plaza from me. This house sold two years ago for $400,000. Now it's listed at $150,000! Looking in the windows I see no damage. I think the mortgage company's strategy is to list it low, and let a bidding war determine the actual price. After all, the bank isn't in the RE business. They don't want to be sitting on the property.

I'm curious 'cause if the price is really $155, I'm thinking of asking Wyatt to do a business deal with me.

cabmandone · cabmandone's Garage

Call them and tell them you have a full price cash offer. See what they say.

rockfan4 · 08-22-2025, 03:43 PM

Does the fine print say anything about who would owe back taxes or HOA dues/fines? I looked at a couple locally and they said the buyer was responsible for past due bills.

look 171 · 08-22-2025, 04:37 PM

Don't know about HOA dues but a title report will show all liens and back taxes owed. 150 sounds like a killer deal but then I am used to CA prices so I can't say much about other parts of the country. What do the rest of the comps look like? I remember reading about your place flooding, what are the damages across the street? It can mean rebuilding all the interior including the lower structure?

Alan A · 08-22-2025, 05:41 PM

You need to look at it.
We bought a repo.

$200k+ of renovations later it was livable… that included mold remediation, all new floors, new kitchen, the list goes on.

Yes - we knew going in. It was 2007 - inventory was sparse and bridge loans were cheap.

Steve Carlton · 08-22-2025, 05:46 PM

$155k could be the opening bid on the 2nd mortgage and you'd have to assume the 1st as well. Or something. I seriously doubt the place went into foreclosure for $155k all inclusive.

Bill Douglas · 08-22-2025, 06:18 PM

Sometimes the bank just wants to recover debts and doesn't care about anything else. So if you said "Sure $150,000, right now. " you may be lucky.

A friend had an opportunity t buy a deceased estate house at about 1/4 of it's value but had to pay full price within a few days, and felt it was slipping through her hands. I said no it's not and leant her the money until she sold her own place and got a loan sorted.

Steve Carlton · 08-22-2025, 07:02 PM

I'm pretty sure all foreclosure sales have to be published and go through an auction process. I suspect crazy cheap deals don't happen. Too many vultures around with cash.

LWJ · 08-22-2025, 07:43 PM

Way back in the 2009 debacle, banks did stupid stuff. Why? They didn't know HOW to liquidate OR care about it. Just getting toxic junk off the books was enough.

Poke around. I like the "full price offer" comment above. That will shake out the issue. And yes, check for HOA, other liens, back taxes, etc.

Also, what is the MARKET for this house today? $400K in the near past doesn't always = $400K today.

Good luck!

look 171 · 08-22-2025, 07:51 PM

You need to run current comps and see how long do similar houses stay on the market. When we were playing this game, if we wee houses that sit on the market for more then 10-15 days, its time to walk or rethink offer. Something is wrong with it (which I love).

HardDrive · 08-23-2025, 06:31 AM

FL is in the tank in many areas.

greglepore · 08-25-2025, 07:58 AM

Quote:

Originally Posted by Steve Carlton

I'm pretty sure all foreclosure sales have to be published and go through an auction process. I suspect crazy cheap deals don't happen. Too many vultures around with cash.

Often the only bidder at the forclosure auction held by the court is the bank. So they end up with the property. Their bid is a credit bid on the debt, so they don't have to come up with any cash. Often then they list the house for a quick sale to recover some portion of what they're owed.

Dixie · Dixie's Garage

A little update...

I discussed the house with Wyatt. He has a bunch of real estate, so I figured he'd know what's going on. He said what I'm thinking is correct. It'll sell for more than $155, but well below market. That's because it won't be contingent on any appraisals or inspections.

He offered to float me a bridge loan, but I declined. I don't feel like taking on any risks that I don't need to. On the other hand, my good friend's boyfriend put in a cash offer for well over $155. She used to be my neighbor before moving in with her BF, so I hope he gets it.

(The house isn't being sold at a literal auction. It's on the MLS via a RE broker. I have no clue if it's the mortgage company's brokerage, but it wouldn't surprise me.)

Dantilla · 08-25-2025, 10:17 AM

I've attended real estate auctions on the courthouse steps.
One needs to have cashier's checks for the entire amount in order to bid.

Weird thought-
Half the people here have hundreds of thousands of dollars with them, the other half are trying to scrape up $100 to make bail.

Alan A · 08-25-2025, 10:26 AM

Quote:

Originally Posted by Dixie

It's on the MLS via a RE broker. I have no clue if it's the mortgage company's brokerage, but it wouldn't surprise me.)

then it's a ****hole.

if it was any good the someone affiliated with the brokerage - family and friends discount cough cough - would have bought it and flipped it.

Steve Carlton · 08-25-2025, 10:35 AM

So it's an REO (Real Estate Owned) vs a foreclosure in process? Who owns the house?

Zeke · 08-25-2025, 11:22 AM

Quote:

Originally Posted by Steve Carlton

So it's an REO (Real Estate Owned) vs a foreclosure in process? Who owns the house?

IDK how it works in FL, but in CA property is not for sale other than auction if being foreclosed. However, I have seen properties "listed" on the real estate sites like Zillow that state somewhere on the page that an auction will be taking place. But they still do their "Zestimate" thing that can be misleading.

But if it is really and truly listed, then I suspect you are right, REO.