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Old 07-04-2011, 07:57 PM
 
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We are looking for a house and was wondering how much less off the selling price are houses selling for in the foreclosure/short sales? We will be moving back but need to stay in a certain price range but like the nicer houses. Any guidance is appreciated.
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Old 07-04-2011, 09:42 PM
 
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Short sales take too long to arrange and the lenders mostly only do this when the owner is more than 90 days past due. Better to wait until the lender bids it in and lists it for sale.
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Old 07-05-2011, 12:19 AM
 
Location: OH
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A house just listed down the street from me for a short sale. They bought it in 2006 for $177,300. It's listed for $140,000. It's up for sheriff sale at the beginning of next month for minimum bid of $96,000 (appraisal value $144,000).
Just an example...
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Old 07-05-2011, 09:28 AM
 
Location: Mason, OH
9,259 posts, read 13,419,452 times
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My experience is the sheriff sale rarely occurs. I see them listed and then they are withdrawn. Can someone familiar with the process tell me why. Does the financial institution at the last minute withdraw it in favor of something more favorable to them?

With regards to short sale, my daughter and son-in-law went through one down in Florida close to two years ago. They had made the decision to move to Palm Bay, outside Melbourne, just prior to the housing burst. Property in Florida had already slipped severely and they purchased a beautiful home for 32% less than it sold new 5 years earlier. They believed everything was safe. Both are school teachers and both had jobs. By the end of their first year Florida had disintegrated and both were told their jobs would not be renewed the next year. On top of it all, their prior house in South-Western Kentucky had sat unsold.

I advised them to stop payment on the Florida house to force the issue but maintain and move back to the Kentucky home. The bank finally agreed to a short sale. It took almost 9 months for it to happen, but it did. End result - second sale 30% less than they bought. Total was 52% less than new cost 7 years earlier. I do not claim this is typical, and in my mind it shows just how rediculously overpriced the housing market had become.

About 3 weeks ago I read an article stating the national average for residental housing value had dropped 37% from its high in 2006.

Then I turn around and read another article stating housing is selling for about 95% of its listed price. I figure this one must be put out by the Realtors Association.

I just know my neice and her husband were recently transferred to Detroit by Ford. They bought a huge house on a golf course, easily $500,000 a few years ago for $220,000.

I suggest going to the county websites, track the homes being put to sheriff auction, and see how many of them actually make it and at what price. Just being curious I have tracked some in my neighborhood which stopped short of actual auction but then were sold for far below so-called appraisal value. Frankly, when I told my brother a house 3-doors from him, which also had the complication of going through a messy divorce, had sold for less than 1/2 his current tax valuation he was not happy.
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Old 07-05-2011, 10:36 PM
 
13,755 posts, read 22,965,896 times
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Quote:
Originally Posted by dadof2divas View Post
We are looking for a house and was wondering how much less off the selling price are houses selling for in the foreclosure/short sales? We will be moving back but need to stay in a certain price range but like the nicer houses. Any guidance is appreciated.

Short sales and foreclosures GENERALLY are NOT good purchases for people who are relocating. First, the process is generally drawn out MONTHS. To give you an example, I have placed bids on three properties in Chicagoland and have not received a response from the bank in less than 115 days. Second, in many cases, the homes will require quite a bit of work to make them livable. Most people relocating do NOT have a great deal of time to wait for short sales and foreclosures. Most employers do NOT want to keep you in temporary housing indefinitely.

In this market, there are a large number of VERY MOTIVATED sellers. I cannot tell you exactly the "% off the peak price" that you will be able to get. However, you will get some GREAT deals at ALL price levels.
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Old 07-06-2011, 04:12 AM
 
Location: Mason, OH
9,259 posts, read 13,419,452 times
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Quote:
Originally Posted by jlawrence01 View Post
Short sales and foreclosures GENERALLY are NOT good purchases for people who are relocating. First, the process is generally drawn out MONTHS. To give you an example, I have placed bids on three properties in Chicagoland and have not received a response from the bank in less than 115 days. Second, in many cases, the homes will require quite a bit of work to make them livable. Most people relocating do NOT have a great deal of time to wait for short sales and foreclosures. Most employers do NOT want to keep you in temporary housing indefinitely.

In this market, there are a large number of VERY MOTIVATED sellers. I cannot tell you exactly the "% off the peak price" that you will be able to get. However, you will get some GREAT deals at ALL price levels.
So, what is the value of Months to someone relocating? I feel a long period at an extended stay motel or a rental apartment may very well be worth the time to evaluate the housing market locally.

Just recently, the last rendition of Cincinnati Homearama concluded, To listen to the hype put out by the sponsors you would conclude everything was business as usual. But then you realize this edition had only 5 homes to view, priced at $672,000 to just over $1 million. 5 homes is what, 25% or less of such exhibitions only a few years ago? But the price tag seems to be only slightly downscaled.

Remember, a Great Deal is relative to what others are paying for similar properties, and also what it will be worth if you put it on the market the day after you buy it. Houses and used cars now seem to have a lot in common.

My constant observation is take your time! An apparent opportunity lost today will be replaced by a better opportunity tomorrow.
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Old 07-06-2011, 01:12 PM
 
59 posts, read 83,407 times
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Buyer beware!!!

If you buy a foreclosed house you may be buying something that needs major repairs. People who are about to lose their houses do not take good care of them and may do intentional damage.

However,..............Cincinnati (Hamilton County Auditor) is in the process of sending our letters with new (lower) appraisals.
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Old 07-07-2011, 06:09 PM
 
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Foreclosures generally list for 2/3 of the loan amount. If you are a savvy buyer, these are a great way to go.

It's very hard to purchase a house sold at a sheriff sale because an attorney representing the financial institution has first dibs on purchasing the property, then listing for a higher price than what's owed.
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Old 07-07-2011, 07:12 PM
 
10,139 posts, read 22,518,280 times
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Quote:
Originally Posted by AGreekDude View Post
Foreclosures generally list for 2/3 of the loan amount. If you are a savvy buyer, these are a great way to go.

It's very hard to purchase a house sold at a sheriff sale because an attorney representing the financial institution has first dibs on purchasing the property, then listing for a higher price than what's owed.

A residential property must sell for 2/3 of appraised value. The sheriff appraises it. If there are no bids, the property is reappraised and put up for sale again.

The lender can credit bid the property meaning that they use the amount they are owed to pay. An individual bidder must put up the 10% day of sale and pay the balance in 30 days.

Lenders bid the property in unless their internal appraisal says it isn't worth the 2/3 in which case they will let an individual bidder take it. Very unusual for a foreclosed property to be purchased other than by the lender but it does happen.
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Old 07-08-2011, 03:39 AM
 
Location: Mason, OH
9,259 posts, read 13,419,452 times
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Quote:
Originally Posted by Wilson513 View Post
A residential property must sell for 2/3 of appraised value. The sheriff appraises it. If there are no bids, the property is reappraised and put up for sale again.

The lender can credit bid the property meaning that they use the amount they are owed to pay. An individual bidder must put up the 10% day of sale and pay the balance in 30 days.

Lenders bid the property in unless their internal appraisal says it isn't worth the 2/3 in which case they will let an individual bidder take it. Very unusual for a foreclosed property to be purchased other than by the lender but it does happen.
You seem quite knowledgeable in this area. I assume if a property is behind in mortgage payments sufficient for foreclosure it may also be behind in property taxes. We all see the TV ads of the guy claiming to have the insight into purchasing property for the back taxes owed, which I consider just another con scheme. In most cases there would be a lender involved who is not about to let this happen.

But am I right in assuming if a property goes to sheriff's sale and is actually sold to a private individual it is probable there may be back property taxes also owed?

Just out of curiosity I spend time on the county auditor's website researching property in my area. One section close to me which is about 12 years old and originally sold for upwards of $400,000 is particularly interesting. It takes awhile for the online data to be posted, but some properties stand out as to recent sales. When the seller is a financial institution, it is pretty obvious the property went through foreclosure with the lender retaining the property, and then was sold. Quite frankly the final sale price is often well below the appraised value at the time of foreclosure. And since I am familiar with several of the properties, I can state they are obviously not falling down wrecks.

I assume the final sale price compared to what was owed the lender may be declared as a business loss and used to offset taxes. But they can only stand so many of these before their business is also a total loss.
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