Houston foreclosure bus tour

February 26, 2009 4:18:10 PM PST
If you're looking at buying a home, you might be considering a foreclosed house.According to the Houston Real Estate Association, one in three homes sold last month was a foreclosed home. So is buying a home in foreclosure the way to go?

Let's face it, it's really tough for those who are losing their homes right now, but if there is a silver lining. For the first time, some people are now able to buy a home, or move up to a bigger property. One Houston realtor has made it easy by offering a bus tour complete with a foreclosure seminar.

He rolls into neighborhoods, in his bright, big yellow bus. Kevin Riles shows prospective buyers foreclosed homes on his tour.

On this day we're in Katy, where the number of foreclosures has crept up to 86. One home originally sold for $125,000 but it's in foreclosure for $94,500.

Once inside, Riles says the home is in need of some cosmetic work. But just like buying any other home on the market, Riles says there is room to negotiate with the bank. You can also ask them to pay your closing costs. Something Riles says will happen 50% of the time.

"It depends on the price and how long it's been on the market," Riles said.

Next on the tour is a four bedroom, two bathroom home. This one is smaller than the first but more expensive because of several upgrades like hardwood floors and granite countertops. It's on the market for $177,000, but originally sold for $200,000. Riles says although this home appears to be in mint condition, before you make a bid on any home, hire an inspector.

"The Texas Property Code does not require a bank to do a seller's disclosure because the bank did not live in the property," he said.

Our final stop on the tour is the 5,700 square foot spread. Its original selling price was $650,000 but it's in foreclosure for $579,000. While most of us are not in the market for a house this grand, Riles says it's an example of an overpriced foreclosed home.

"People automatically assume foreclosure equals a deal and that's not always the case," he said.

Riles says most foreclosures are listed at about 70-80% of the original price. So a home that was originally a $100,000 should now have a foreclosed price of $70,000 to $80,000.

Our expert also tells us to keep in mind some lenders have certain guidelines that won't allow you to buy a foreclosed home. If you are interested in attending the free Houston Foreclosure Bus Tour click here.

The only condition is that you must be pre-approved and agree to hire Riles as your agent if you are interested in one of the homes on his tour.

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