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Realistically speaking . . . how much can you offer for a home that is in distress?
I guess what I'm asking is . . . if I can afford a $400K house . . . can I look at a price point of 600K and offer them 200K less than they are asking?
Realistically speaking . . . how much can you offer for a home that is in distress?
I guess what I'm asking is . . . if I can afford a $400K house . . . can I look at a price point of 600K and offer them 200K less than they are asking?
What is a "price point"? Do you mean asking price, market value as of last comp sales price, or tax value? Let's get that question squared away and move from there.
Banks are not as flexible with price as are individuals. Once a house goes into foreclosure the bank has it appraised and they stick pretty close to that price until it become obvious (after a long listing period) that it won't sell at that price. Getting the bank to agree to a short sale is difficult. Foreclosures are not usually a bargain. If a seller lets their home go into foreclosure common sense tells you that they aren't going to keep it up. Some even intentionally damage the property. And, the bank wants what is owed on the home, which in some cases is more than the appraised value.
Yes, I mean asking price of 600K . . . I heard there are many builders who will negotiate right now due to holding so much inventory. I can't afford their asking price but I can afford within 200K of their asking price . . does that make sense?
The home I'm selling right now . . . we purchased as a foreclosure and yes, it needed work but it has been worth every cent!
Also, I know of a house in Waxhaw (bank owned) that was listed at 993K then lowered to 824K and just sold for 700K . . . so I know it's out there . . I guess I just need to start making some offers and see what happens . . .
"Price point" is an overused and meaningless term to me. For sure the deals are out there. New, resale, and foreclosure. Whatever the asking price is, ask at least 20 percent under that. If they don't bite, move on. Heck, offer 200k under asking price. You might be surprised at what you will get.
Offer what you want. If they are interested they will respond. Typically the first counter they will only come $500 of the orig list price or even come back at the list price. Hold firm. I have purchased plenty of foreclosures and you just have to play the game. On homes that are foreclosed around $200K as of late we have been able to get them down ~$20K or so....
I'm wondering (a) when the banks will wise up and start loaning money again-slash-breaking the prices on their vacant foreclosed homes to move them out of inventory [do the banks really want to be in the real estate biz again?] and (b) what happens when whole neighborhoods foreclose, or when the amount of vacant foreclosures I'm seeing in neighborhoods begin to really affect the values of the occupied homes.
When I stand in the yard of a foreclosed vacant home and look around the block, all I see is neighborhoods that are getting vacant. I certainly don't want to be the guy who buys the first foreclosure in a neighborhood. Where are all the people who leave these houses going?
These are just some of my random thoughts about foreclosures now. Maybe the "deals" on foreclosures are only on higher-end foreclosures, as opposed to moderate priced houses? I have yet to find anything that has a reasonable price, doesn't require massive fix-up, doesn't come with a neighborhood of value-lowering vacancies, and payments that can be met with current rents.
Some banks and even Fannie Mae and Freddie MAc are starting to fix up the properties, Paint carpet, new appliances etc, and still listing under market value. I have noticed as of late a bunch of Fannie Mae homes coming on the market. After some research found out these homes were rented to Katrina victims that have now been able to get back on there feet.
Neighborhoods that were low to begin with ~$100K seem to be where most of the neighborhood is in foreclosure as you move up the food chain it is not as frequent.
There are a ton of foreclosures in high end neighborhoods. We've seen 10 in the 500-700k range that we've looked at. I think there are a lot b/c these people got in over their head on what they could afford.
Neighborhoods that were low to begin with ~$100K seem to be where most of the neighborhood is in foreclosure as you move up the food chain it is not as frequent.
I disagree with this. We have been looking in the 250-350 range for our next home. In the NE/UniversityArea/Huntersville I have been suprised at the number of "Pre-foreclosure", Bank Owned, Distressed listings that I have seen. Some of these are in neighborhoods built from 2000-2005. Highland Creek, Davis Lake, Lexington, Chatham are a few of the places where we have seen this.
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