Bank Owned Property (Orlando, Winter Springs, Winter Garden: second mortgage, real estate, foreclosures)

[prozario]

I am looking at few bank owned property around $200K range in Davenport. Can someone give me some idea how much bank would typically go down from their asking price. Keeping in mind that bank has to pay taxes, maintenance etc. so they might be bit motivated to sell. Has anyone done recently - how much can I expect them to go down from asking price.

[GregTraub]

You can expect them to sell for market value given a 30-90 day on market goal. If it's been on the market a while they will come off 10-20% of that market value. Just like any other owner, they do not want to "give it away" but they also are much more open to what true market value is. They have no emotions involved in the deal and know exactly how much it costs them every day it is not sold.

That being said these banks have never even seen the home they are selling, they rely on Broker price opinions that could have been completed yesterday or 6 months ago when they first started the foreclosure process. Structuring offers and presenting them to banks to get the best deal can be a specialty in itself, and I always reccomend using the advice and experience of an agent that knows the REO market.

[FlaBoundGal]

When I check realtytrac.com it says there are over 400 foreclosed homes in Waterford Lakes. I understand the market etc. That just seems like a high number to me. Any insight, is this because of the area, or jobs moving out, or what? Plus, I noticed for th size of Wedgefield they have their share of foreclosures also. What is going on?

[prozario]

Gretgrab ... thanks for the reply. The one i was looking for is already about 20% off the mkt value (i.e. what other people are selling for in the subdivision). But the problem is these houses are zoned for short term, and most other houses sell with furniture included. But the bank owned ones don't have any furniture.

So, whoever buys it would lose at least 2-3 months of revenue in getting the furniture in, hooking up tvs, arranging etc. It would cost you more, as now you're buying all the furniture yourself from retail, as oppose to when a builder sells it fully furnished (who obviously gets volume discounts).

The other problem is, regular houses would be well maintained, as there are people leaving there, cleanup being done etc. These bank owned ones probably haven't been used for months . So, there would be extra cleanup cost (pool etc., unexpected repairs etc. So, there would be higher level of risk involved.

Bottom line is a fully vacation furnished house, with "blue" pool water is lot more attractive for buyer than a empty vacation house, with greenish pool water, "as-is" condition house. That's why it is already discounted around 20%. I was hoping they would go down even more if it is sitting in the market for a while (especially in davenport where there is a glut of inventory for sale on vacation houses).

[GregTraub]

prozario, you have alot of great points showing how you and most rational people would value property, classic substitution theory.
All I can say without giving away my experience for free is to find a way to concisely and effectively relay this info to the bank.
But the biggest thing when puchasing an REO is to just make your offer, banks want to sell now, so the quicker you move the better the deal you get. Remember, having an agent on your side is free to you, the bank has negotiated their commissions with the listing agent and they are set whether you go straight to them or have you own agent helping you throughout the process.

FlaBoundGal - I actually live in the waterford lakes area. As far as realty trac statistics go, their counts can get bloated from the actual number of distressed properties in an area. They are counting people that may just be a little late with their payments and are not actually going to foreclose, and occasionally they will count a first mortgage and a second mortgage as 2 different foreclosures even if it's on the same property. That being said, statistically, they use the same type of information on all area's, so everything should be somewhat relative.

I think the waterford lakes area may be having more trouble with foreclosures than other area's because this area was one of the hottest during the boom with lots of investor activity especially in the Avalon Park area (which is the same 32828 zip code of Waterford). With investors, come less attachment to homes, and lots more "walking away" from property that has become less valuable than what is owed on them....hence the foreclosures. There is nothing wrong with the area as far as jobs, there's great shopping, easy access to highways etc.
Crime has been increasing lately, but that may just be because of more vacant homes in the area. Generally speaking though most neighborhoods actually IN waterford Lakes, Eastwood, StoneyBrook, and the southern end of avalon park Blvd are quite safe. ****Always check crime stats with Orange County Sheriffs office.

I still like living on this end of town, but have seen the appeal of West orange County (including SW orlando, Windermere, even Winter Garden) and more northern towns like Winter Springs, Lake mary and the like. It all depends on your commuting needs and the feel you get when driving through the area really, so check them out or have someone give you a tour

[prozario]

GregTraub - thanks for all the info.

2 more questions if don't mind. Is there any website or any other source of info that tells me which subdivisions around Disney are more popular for rental purpose. Only methods I've found so far is to go to vrbo.com and see houses listed for vacation, and then go into their calendar to check how many days are booked so far. It's a crude method and bit time consuming. Is there any better way of doing this type of research.

Also, can I expect to find real estate agents who can help me find best vacation rental areas around Disney? Most of them seems to be just happy providing a list of available house for sale - we'll I can do that just simply looking at web. I need an agent who knows enough about HOA fees, maintenance costs rental occupancy, which subdivisions has highest rentals etc, or explain me why Calabay parc is better or worse than Solana etc. Does such expertise exists in any particular real estate agency, or do I need to do these types of research by myself? Can you recommend someone - my email is rozario@gmail.com.

[omar1]

wass up guys i need advice. i have been trying to sell my house to buy another one but no luck what do you think if i took cash out to put a down payment on the new home?? need help asap thanks..

[Magnulus]

There are foreclosed homes all over the Orlando metro area. Waterford Lakes isn't unique. The area grew too fast and there aren't that many well paying jobs. Waterford Lakes has slightly more crime than surrounding areas and there is more traffic, but other than that there isn't alot wrong with the area. However, there's not alot right with it, either.

[AONE]

Bank property will vary greatly, mostly depending on the motivation of the bank to get a property off their books.

I work with REO's which are the large scale bank properties. 10M up to the Billions. they tend to come in from 24 cents +3 to the low 60's + 3. but these rates are on large scale purchases. If you buy a Billion its pretty easy to get it at 34 cents on the dollar... ready to write a check..lol

If banks have nothing but low offers they will likely counter offer on the low ball ones. I have several investors I work with and we regularly get them to counter. The discounts can be sizable so don't think they won't drop more than 10% or something, I know they will from experience. I suggest get an agent that deals with investors. tell them your goals and they should be able to accommodate you aim. It doesn't cost you anything to use an agent... well as long as they don't have the junk fees...commonly referred to as administrative fees... and even those are normally less than $300, There are some of us out there that don't charge it.

[cfIfan]

Alot of foreclosure problems have a greater need for renovation, because the owners/tenants were bitter etc. I have one foreclosure which looks like a great price, but they poured cement down the toilet and ripped out the kitchen and this is on a 2006 home. Thus to repair all of this will bring it inline with the well priced homes. For my money you have to be very careful with foreclosures. In terms of taking money out to buy a new property, unless you know you can rent out the old one or can financially pay both mortgages, i wouldnt advise my clients to do that. Without knowing the property and its price, its hard to advice.

In terms of Realty Trac, i have never subscribed to it, but if you are just using the free service, i believe that it not only shows foreclosures, but the list also includes lis Pendens(i.e tax liens), so not neccessarily all the properties you are looking at are foreclosures.

If you need info on areas close to Disney to rent out, i would highly recommend engaging a realtor to assist you. There are alot of areas, and without a realtors specialist knowledge, it can be a mine field.

Hope this helps.