Tips on buying a home in Centreville (short sales, foreclosures)

[b1trswt]

My partner and I have been looking at several properties in the centreville area for the last 5 mths and we have been unsuccessful at solidifying a contract on a place. We've put in 4 contracts so far and all have been turned down either because someone bid higher (bid well over the asking price; we've been told these are investors) or the seller does not want to take our FHA loan. Most of the properties (townhomes) that fall in our price range are short sales or foreclosures (200k or less).

I was just wondering if anyone within our price range has had similar problems? What are you doing to better your odds? If you've been able to buy a home in centreville recently (last 6 mths) within our price range then what do you think helped you to get to closing?
Thanks for any information you can provide.

Regards, Hopeful Future Centreville Home Owner.

[v2009]

My clients (I'm a realtor) have had the same problem with their "low-ball" offers. With foreclosures and short sales the asking price is usually the minimum price the bank is willing to accept. They have their guidelines that they follow, and every certain period of time they drop the price by certain percentage. There are exceptions, but that's how majority of foreclosures in my experience have been.

So if you want to get the property, you should offer at least the asking price with as few contingencies as possible and with settlement date as early as possible. Home inspection is usually only for your information, meaning you are buying "as-is", it's either yes or no, and they won't fix anything.

About FHA loans - they don't want to deal with it because if a house appraises for less than the price, that value sticks with the property for six months, and they'd have to either lower the price or wait.

[Jlyles]

I'm a Realtor. The market has changed (dramatically) since April, when two of my clients started sprinting. We were writing weekly contracts. Both of them got into condos .. the townhouse market finally rose above their price points (<250K and <200K). I love Centreville, and I've put many clients into townhomes there, but unless you're looking daily, and writing at market (or above what you think is market) contracts, you won't succeed. I don't think it's your FHA loan because cash buyers are less likely to buy at market pricing (they want a deal). "Well over asking" *IS* market ... listing agents are pricing well so that they can get a contract accepted within 3-4 days.

Write at or slightly above market if you need subsidies, no contingencies, closing date dependant on appraisal (which is entirely resonable, IMHO). In some markets I tell my clients which areas they can afford based on recent sales, not recent listing prices ... there's a distinct difference these days.

I wish you all the best. It's easy to get burnt out during the hunt.

Originally Posted by b1trswt

My partner and I have been looking at several properties in the centreville area for the last 5 mths and we have been unsuccessful at solidifying a contract on a place. We've put in 4 contracts so far and all have been turned down either because someone bid higher (bid well over the asking price; we've been told these are investors) or the seller does not want to take our FHA loan. Most of the properties (townhomes) that fall in our price range are short sales or foreclosures (200k or less).

I was just wondering if anyone within our price range has had similar problems? What are you doing to better your odds? If you've been able to buy a home in centreville recently (last 6 mths) within our price range then what do you think helped you to get to closing?
Thanks for any information you can provide.

Regards, Hopeful Future Centreville Home Owner.

[b1trswt]

Thank you all for the information. I definitely appreciate the feedback.
One contingency I do not want to do without is the home inspection contingency. We've offered at listing price and we've taken away the seller subsidy on the contracts we've submitted so I'm wondering if the home inspect contingency is making us less appealing. I want to be able to cancel the contract if I don't like something in the inspection report. I accept that the property is 'as-is' (as most short sales and foreclosures are) and won't ask for repairs, but I need the home inspection to let me know (hopefully) what repairs are needed and whether I want to deal with that.
Any thoughts on how to deal with the home inspection contingency?

[v2009]

I would say - never buy a house without a home inspection contingency, not even a brand new house. If something is wrong with the house, you might end up paying tens of thousands to repair. It's a standard contingency, and most of the buyers have it, so this particular one should not affect the bank's decision.

If you don't want to put a home inspection contingency, you could bring a home inspector to the house BEFORE you write an offer. The downside of it is that you'll have to pay an inspector before you even know if your offer will be accepted. Also, a lot of foreclosures are winterized meaning the water and/or power are turned off, so the inspector won't be able to check plumbing, etc.

Unless you are paying cash, you should always have a financing contingency (and appraisal that goes along with it).

To summarize, I'd recommend always putting the following contingencies: home inspection, appraisal, and financing to leave yourself a way out.

[Jlyles]

Well, for what it's worth, most short sales and all REO's are "as-is", which means that a home inspection contingency may just boot you off the pile. The seller doesn't want someone who doesn't want the property as-is, so it will most likely take the contract which specifies that you will take the property without a home inspection contingency.

That said, you can alway have a home inspection for "information only", take the property as it was on date of contract (not after months of inattention or neglect), etc. You still have financing, appraisal and HOA docs. If it's a short sale, you have a time contingency ("written approval from lender(s)).

I would never advise a client to not have a home inspection, so we have quite a few .. no surprises, just a lot of information about home ownership so far!

Originally Posted by b1trswt

Thank you all for the information. I definitely appreciate the feedback.
One contingency I do not want to do without is the home inspection contingency. We've offered at listing price and we've taken away the seller subsidy on the contracts we've submitted so I'm wondering if the home inspect contingency is making us less appealing. I want to be able to cancel the contract if I don't like something in the inspection report. I accept that the property is 'as-is' (as most short sales and foreclosures are) and won't ask for repairs, but I need the home inspection to let me know (hopefully) what repairs are needed and whether I want to deal with that.
Any thoughts on how to deal with the home inspection contingency?