Foreclosure Buyers respond here please (how much, hotel, new home)

[kbuild]

Just, wanted to add my Two cents. I live in North Port, and I am a Remodeling Contractor. We have been doing alot of kitchens and baths for new homeowners of foreclosures. The prices they are buying these properties for are unbelievable. Most only need a little TLC. And these new owners are moving in with nice equity. Now wait until the property values raise. Smart investments.

[Roese]

Originally Posted by boyohboyohboy

Hi Angie,
We relocated here in Aprl and purchased a foreclosure. The house had been vacant for 1 1/2 years. We were able to negotiate with the bank in a fairly quick manner & closing went smoothly. The price we paid over $150K less than what the people across the street paid for the identical model in 2005 . And our lot is more desireable (larger with a fabulous view). We are very happy.

Thanks for the information, by the way where are you located? Did you use a realtor and was the price more than the orignal asking? We are so new at this. The last time we bought a home was 2001 and it was a norma real estate/ realtor sale. Thanks for sharing.
Angie

[Roese]

Originally Posted by kbuild

Just, wanted to add my Two cents. I live in North Port, and I am a Remodeling Contractor. We have been doing alot of kitchens and baths for new homeowners of foreclosures. The prices they are buying these properties for are unbelievable. Most only need a little TLC. And these new owners are moving in with nice equity. Now wait until the property values raise. Smart investments.

www.kbremodelers.com

Good to know! Thank you,
Steve and Angie

[Roese]

Originally Posted by Big House

Hey Angie,
We have an offer in on a foreclosure right now. They countered our proposal, and we are awaiting a reply. Hope to hear soon. I will keep you posted on how things go. The one thing you will need to do and know is that when you buy a foreclosure - it will only be done "As-Is" which means you are responsible day one for anything - so you need a good inspection. There is no warantee, there is no disclosure statement because the banks haven't lived there. - I think I have that right, others can help more.

I will look forward to hearing from you. One question? I know of another foreclosure sale that they had to pay off old bills. Only a water bill, but do they disclose that info before you make an offer? Any information will be helpful.
Thanks, Angie

[Roese]

Originally Posted by boyohboyohboy

Hi Angie,
We relocated here in Aprl and purchased a foreclosure. The house had been vacant for 1 1/2 years. We were able to negotiate with the bank in a fairly quick manner & closing went smoothly. The price we paid over $150K less than what the people across the street paid for the identical model in 2005 . And our lot is more desireable (larger with a fabulous view). We are very happy.

Sounds Great! We are hoping for that good fortune also. Keeping our fingers crossed!! Thanks for the info. Angie and Steve

[Roese]

Originally Posted by kbuild

Just, wanted to add my Two cents. I live in North Port, and I am a Remodeling Contractor. We have been doing alot of kitchens and baths for new homeowners of foreclosures. The prices they are buying these properties for are unbelievable. Most only need a little TLC. And these new owners are moving in with nice equity. Now wait until the property values raise. Smart investments.

www.kbremodelers.com

We will keep you in mind if we need help! Steve is a very good at painting and landscaping. I guess it would depend on the degree of repairs. Hopefully not too extensive, but we are willing to go that route for a better investment. Thanks for the information. Angie

[Roese]

Originally Posted by SoFLGal

Couldn't have said it better myself, debvic! That is exactly right if you see verbiage in the listing that states. "listing price may not be sufficient to cover all encumbrances". This means it's a pre-foreclosure or short sale. Often times short sales are a long drawn out process and they often don't sell for list price-often it's more. Many times the short sales take months to close and frankly, I have not seen a lot of "good deals" with short sales. Another thing is that you can't always tell that the property is a short sale by looking at the listing. Many times the Realtor puts this info in the private remarks which can't be seen by the general public. Personally, I think this info should be in the public comments. Either you want to deal with short sales or you don't-if you don't you should be able to exclude these. Looking up stats on short sales roughly 90% end up in foreclosure. For a number of reasons-length of time to negotiate the deal, not reducing the price and often times coming back over list price, and on and on. ~stepping off my soap box~

OK, now on to your next question about a typical price under the list price. To understand what they might take I think you need to understand the inner workings of the foreclosure offer process.

First, if you are looking at a foreclosed property, that is the price and sometimes much lower unless you are bidding against another person. This is how the banks arrive at the list price. The banks usually gets at least 3 BPO's (brokers price opinions) on a property to determine what the list price will be. One of the BPO's is done by the list agent on the property and the other two are done by Realtors that have no connection with the property. The Realtors are paid $65-$125. For an outside BPO- 3 pictures of the home, 3 active comparable properties with in a 1 mile radius and three sold properties with in a 1 mile radius and pictures of any damage to the house. An inside BPO would include the same as above as well as a pictures of the inside of the home. Usually the three BPO's are pretty close in similarity and sometimes they are exactly the same. That's how they determine what the price of the property should be. So even if the bank is out in California (where many of them are) they know what the property is worth and they know what damage has been done to the home, if any.

Now on to the players in the game. At the top is the "client/investor" next in line is the Asset manager and then there's the buyer and the Realtor. Once the list price is determined on the home from the BPO's, the home is listed and an offer comes in. The offer(s) are then sent to the asset manager to review. If they receive many offers the asset manager often tells the list agent that they only want to see the one contract that gives them the best bottom line. For instance, if you submit a contract for 150K and ask for 5K in closing costs to be paid by the bank and someone else submits a contract for 148K but doesn't ask for any closing costs to be paid, chances are the offer for 148K would be the offer that is sent to the bank-there are other things they consider but this gives you an idea of how they work. It is also procedure if a bank receives more than one offer to go back to all potential buyers and ask for their highest and best offer. At that time you can stand with your offer or change anything you wish on the offer. They do this for two reasons-one is to be fair to all parties and the other is to get more money for their property. If you are bidding against someone else there's a good chance you might raise your price.

Back to the offering procedure, the offer goes to the asset manager which usually has authorization to approve an offer anywhere between 10%-15% below list price. If it goes any lower the asset manager often times will not respond. Remember, when these homes go on the market they are already listed at the very low end of the market. Another thing to keep in mind is the banks usually reevaluate the properties every 30 days if not sooner. If you see a listing that has been on the market for close to 30 days and is a foreclosure there's a pretty good chance that listing will be dropping their price. The banks will not drop the price if they are currently negotiating an offer. Many times the asset managers get bonuses for how quickly they get the listing under contract and how close they get the offer to what the list price is. The banks main objective is to get the most amount of money in the least amount of time.

I forgot to mention in my previous post-if you are offering on a bank owned property you must have an approval letter from a bank or you must be able to show proof of funds if you are paying cash.

All of the above is just speaking in generalities. Each bank is different but after dealing with many, many banks this is my experience. Alright this is getting way too long now. I think I'll give it a rest

Wow that is a lot of information. I will havfe to read that again. I hope we can find a great deal whichever way we decide to go. Again thanks, any information or shared experiences only increases our knowledge enabling us to make an informed decision. Angie

[Big House]

Originally Posted by Roese

We will keep you in mind if we need help! Steve is a very good at painting and landscaping. I guess it would depend on the degree of repairs. Hopefully not too extensive, but we are willing to go that route for a better investment. Thanks for the information. Angie

Hey Angie,
I just received my contract on a foreclosure in PGI! It didn't take that long either. Did you recieve my DM a while back? I never heard back from you. I am going to be inspecting my house tomorrow. I'm from MD, and have been going through the process of finding a house for months. I've been dealing with a great agent! I heard that you and your husband may be stopping down soon. If you look on the Meet-up thread, maybe you'll be around in Mid-October to join some of us here for a drink, scotch or beer, soda, tea, or milk, maybe. LOL Some people even enjoy Gatorade. LOL

I wish you the best - I've gone through an enormous amount of hurdles to get here.

[kbuild]

Always her to help. Title insurance will I do believe wipe out any liens or claims.

[Roese]

Originally Posted by Big House

Hey Angie,
I just received my contract on a foreclosure in PGI! It didn't take that long either. Did you recieve my DM a while back? I never heard back from you. I am going to be inspecting my house tomorrow. I'm from MD, and have been going through the process of finding a house for months. I've been dealing with a great agent! I heard that you and your husband may be stopping down soon. If you look on the Meet-up thread, maybe you'll be around in Mid-October to join some of us here for a drink, scotch or beer, soda, tea, or milk, maybe. LOL Some people even enjoy Gatorade. LOL

I wish you the best - I've gone through an enormous amount of hurdles to get here.

Thanks for the invite and the information. My husband and I do not have a definate date yet, but we hope soon. We still have two places to sell in Ohio. Thanks again, Good luck with your new home. Can't wait to hear how much you love it PGI.
Angie and Steve