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301 msWoods Distressed Homes for Sale

Looking for a bargain? Include foreclosures, HUD-owned, VA owned and bank-owned properties in your search. But be aware of potential pitfalls when purchasing this any of these types of property.

Here are a few things you’ll need to know before investing in any distressed property.

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Foreclosures

While it is possible to find good foreclosure opportunities, contrary to popular belief, most foreclosure sales begin with a list price that is more than what the property is worth. After all, the bank’s goal is to satisfy all liens against the property, recoup attorney fees and other costs associated with the foreclosure process, and make a profit. So the price is usually anything but a bargain.

Occasionally, there is enough equity left in the home to make purchasing a foreclosure a good investment, assuming everything else goes right.

Advantages
  • Possibility of finding a home with equity (rare)
Considerations & Concerns:
  • When you buy a foreclosure home you are getting the home in as-is condition. This means there could still be someone living there who has yet to move out or be evicted. And a lot can happen to a home in the meantime.
  • In addition to the primary mortgage (first lien), other outstanding liens can exist, from tax liens to second and third liens, mechanic’s liens, homeowner’s association (HOA) dues and more. You are inheriting these obligations.
  • Many banks will provide a pest inspection report if you ask for one. Your offer should be contingent on a home inspection.
  • If you are the winning bidder, then you will be required to pay the full bid by cashier’s check.

Bank-Owned Properties (a.k.a., REO)

When a property fails to sell at the foreclosure auction, it reverts back to the bank and becomes part of its real estate inventory. At this point, the primary mortgage is written-off as a loss, and the bank will negotiate with any remaining lien-holders and pay these off, in addition to any other HOA dues, mechanic’s liens, etc.

The first thing to realize about buying a bank-owned property is that the bank is never in a hurry to sell. Unlike an individual seller, there is no personal financial need to sell the home in a hurry. There is neither frustration nor desperation. Quite the contrary, the bank will act in a calculated fashion to maximize profit.

Advantages
  • Possibility exists to find a home below market value.
Considerations & Concerns:
  • Offers and counter-offers are almost never handled in-person, but instead via FAX, email or some other electronic means.
  • Don’t be surprised if the bank’s counter-offer is not what you hoped. The bank’s counter offer must show to shareholders and auditors that the bank made a good-faith attempt to get the maximum, fair-market price. Only when this is not possible will the bank entertain a lower price.
  • Be prepared to make several counter-offers before an acceptable price can be reached.
  • Ask to see any and all reports, such as homeowner’s inspection reports, pest inspection reports, etc.
  • You will want to have the home inspected and appraised, but this will be come at your own expense.
  • Can ask that the bank make needed repairs, although they generally have no interest in doing so.

HUD-Owned Properties (a.k.a., REO)

The main difference between a HUD-owned property and a bank-owned property is that you are dealing with the federal government and not a private bank. When someone defaults on an FHA-insured mortgage, the lender forecloses on the home and then files a mortgage insurance claim with HUD. HUD then pays the lender what is owed and takes ownership of the property. HUD’s goal is to recover the amount of the mortgage insurance claim, and hopefully get a fair market price for the home.

Advantages
  • Opportunity exists to purchase homes below market value
  • If the home meets FHA guidelines, qualified buyers may be able to purchase the home with an FHA-insured loan. Even if the home doesn’t meet FHA guidelines buyers may be still able to purchase it under FHA’s 203(k) Rehabilitation Loan program, which provides funds for the improvements in a single loan closing. The loan-to-value is based on the estimated future value of the home, with the repairs complete.
Considerations & Concerns:
  • HUD homes are sold as-is, and HUD will not pay to make any needed repairs. As with any home, buyers are strongly encouraged to have the home inspected and appraised.
  • Investors may bid on HUD-owned homes only after a period of time has elapsed, called the Exclusive Sales Period, at which point HUD will accept bids from all buyers, including investors.
  • Bids cannot be submitted directly by buyers. HUD uses private contractors, called “Marketing & Management Contractors” to manage its inventory. These contractors work with HUD-registered real estate brokers, called Local Listing Brokers, to accept bids, which can only be submitted by HUD-approved agents.

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2216 West Barcelona Drive, Muncie, IN 47304 2216 West Barcelona Drive, Muncie, IN 47304 Add to Favorites
Subdivision: Halteman Village  
Large LR in the front and a FR in the back. 3 BR's, 1.5 baths, fenced yard and a carport. Nice kitchen cabinest. Case#156-209256.
3 Beds, 2 Bath Areas, 1421 SqFt
$68,000 (For Sale)
RE/MAX Real Estate Groups
932 Windsor Drive, Shelbyville, IN 46176 932 Windsor Drive, Shelbyville, IN 46176 Add to Favorites
Subdivision: Lantana  
Located in beautiful Lantana Estates. 4 Bedroom, 1.5 Bath home with basement. Bath areas on each level. This lovely home is very cozy with extraordinary potential for you to make your own! This home is just waiting for you to bring all of your style and c...
4 Beds, 2 Bath Areas, 1872 SqFt
$99,000 (For Sale)
Keller Williams Indy Metro S
2408 West Rock River Ridge Road, Crawfordsville, IN 47933 2408 West Rock River Ridge Road, Crawfordsville, IN 47933 Add to Favorites
Subdivision: NA  
Much potential with this property located along Sugar Creek!
3 Beds, 1 Bath Areas, 2103 SqFt
$39,900 (For Sale)
F.C. Tucker West Central
1905 South 17th Street, Terre Haute, IN 47802 1905 South 17th Street, Terre Haute, IN 47802 Add to Favorites
Subdivision: NA  
Large lot with private backyard. This lot is located close to US 41 with easy highway access.
0 Beds, 0 Bath Areas, 0 SqFt
$17,990 (For Sale)
RE/MAX Advanced Realty
16 Sable Chase Circle, Brownsburg, IN 46112 16 Sable Chase Circle, Brownsburg, IN 46112 Add to Favorites
Subdivision: Austin Meadows  
Beautiful Home! Eating area and formal Dining area! Large Living Room with Fireplace! Upstairs Loft with Attractive view of the Living area Below. Sunlit Master Bath! Garden Tub. Separate Shower. Double Sinks! Perhaps the best feature is the Kitch...
3 Beds, 2 Bath Areas, 3514 SqFt
$165,000 (For Sale)
AL Page Realty
1760 Cape Charles Court, Cicero, IN 46034
Fixer-Upper
1760 Cape Charles Court, Cicero, IN 46034 Add to Favorites
Subdivision: Cicero Shores  
Great fixer on Morse Lake! Great views! 3 bedroom, 3.5 bath home, walk out basement, open floor plan, spiral stair case, multi-level deck... So many features! This home does need your handy work, but will be well worth it!
3 Beds, 4 Bath Areas, 3298 SqFt
$255,000 (For Sale)
Nottingham Realty, LLC
3633 West Interstate Block Road, Madison, IN 47250 3633 West Interstate Block Road, Madison, IN 47250 Add to Favorites
Subdivision: NA  
This 3 bedroom, 2 full bath home has an over-sized one car garage with breezeway and deck and there is a fenced back yard with a nice shed. Property is being sold "As Is" "Where Is" with no warranties expressed or implied.
3 Beds, 2 Bath Areas, 1232 SqFt
$80,000 (For Sale)
Coldwell Banker Martin Miller
220 North Walnut Street, Atlanta, IN 46031 220 North Walnut Street, Atlanta, IN 46031 Add to Favorites
Subdivision: NA  
There are 2 buildings. One is a small building with a single family residence that is 2 bedroom with one of them being up in a loft. The other is a long deep building that is a duplex. Box are fixer uppers and probably require cash to purchase.
0 Beds, 0 Bath Areas, 0 SqFt
$27,250 (For Sale)
The Poindexter R.E. Agency
3219 South Weinbach Avenue, Evansville, IN 47714 3219 South Weinbach Avenue, Evansville, IN 47714 Add to Favorites
Subdivision: NA  
Property is offered as-is. This 805 SQ FT 2 bedroom home features almost an acre of land. Status "UI" insurability. “Plumbing failed to hold pressure at time of initial inspection. Due to this failure, HUD’s Field Service Manager will not permit the ...
2 Beds, 1 Bath Areas, 1605 SqFt
$31,000 (For Sale)
Keller Williams Indy Metro S
1705 Lafayette Avenue, Lebanon, IN 46052 1705 Lafayette Avenue, Lebanon, IN 46052 Add to Favorites
Subdivision: NA  
Great investment opportunity in Lebanon. This home serves a lot of potential. 4 bedrooms and 2 bath ranch along with an attached 2 car garage on a larger corner lot. Parquet flooring in great room, ceramic tile in the kitchen and then hardwood throughout ...
4 Beds, 2 Bath Areas, 2042 SqFt
$104,900 (For Sale)
Carpenter, REALTORS®
3643 Central Avenue, Indianapolis, IN 46205 3643 Central Avenue, Indianapolis, IN 46205 Add to Favorites
Subdivision: Marion Highlands  
Large brick 2 story, big lot, large 2 c detached garage, lots of room & potential! Property needs work.
4 Beds, 3 Bath Areas, 3318 SqFt
$118,000 (For Sale)
J. Farmer Realty Inc.
1334 West 81st Street, Indianapolis, IN 46260 1334 West 81st Street, Indianapolis, IN 46260 Add to Favorites
Subdivision: Greenbriar  
Wonderful opportunity for a spacious tri-level in the Greenbriar neighborhood. This 5 bedroom home has a huge family room, formal dining room, eat-in kitchen with breakfast area, and a large lower level that can be finished to provide additional living sp...
5 Beds, 2 Bath Areas, 2656 SqFt
$129,900 (For Sale)
CENTURY 21 Scheetz
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