purchasing a home - how to proceed?

[Neo.]

foreclosure home, needs a little work (nothing major, is structurally sound, no foundation issues, just needs carpet/tile replacement and some updating)

initial sale price was 121k, now dropped to 110k. estimated value of the home is around 150 - 160k

what kind of offer should I make?

im thinking offering 100k, with the hopes of getting them to meet in the middle in the 105k range? or should I readjust my thinking on that offer?

[sa_butta]

foreclosure home, needs a little work (nothing major, is structurally sound, no foundation issues, just needs carpet/tile replacement and some updating)

initial sale price was 121k, now dropped to 110k. estimated value of the home is around 150 - 160k

what kind of offer should I make?

im thinking offering 100k, with the hopes of getting them to meet in the middle in the 105k range? or should I readjust my thinking on that offer?
I would say if they just dropped it to 110k then you should offer 105k firm.

[CosmicCowboy]

First thing to get in your head is the value isn't 150-160 if you can buy it for 105. How much are you planning to put down in cash?

[Neo.]

First thing to get in your head is the value isn't 150-160 if you can buy it for 105. How much are you planning to put down in cash?

well of course its not currently worth that much because it needs work, and is a foreclosure, but based on the neighborhood, all the homes are valued/selling for 140-170k.

and probably just the minimum down. saving more of our cash available for work on the house. monthly payment isnt an issue though, just trying to see what i should consider for my first offer.

[coyotes_geek]

foreclosure home, needs a little work (nothing major, is structurally sound, no foundation issues, just needs carpet/tile replacement and some updating)

initial sale price was 121k, now dropped to 110k. estimated value of the home is around 150 - 160k

what kind of offer should I make?

im thinking offering 100k, with the hopes of getting them to meet in the middle in the 105k range? or should I readjust my thinking on that offer?

Depends on what you're buying the property for. New primary residence? Rental? Flip?

[Neo.]

Depends on what you're buying the property for. New primary residence? Rental? Flip?

Primary residence for the time being.

[CosmicCowboy]

well of course its not currently worth that much because it needs work, and is a foreclosure, but based on the neighborhood, all the homes are valued/selling for 140-170k.

and probably just the minimum down. saving more of our cash available for work on the house. monthly payment isnt an issue though, just trying to see what i should consider for my first offer.

Are you pre-qualified?

[Neo.]

Are you pre-qualified?

yes. thanks for the unneccesary question. :rolleyes

[CosmicCowboy]

Don't be so quick with the rolley eyes...it goes to whether your low ball offer will be taken seriously. If it's been on the market more than 6 months and you are pre-qualified and can close in 30 days I would hit them at 95K and see if they blink. You make money on real estate when you buy it right.

[silverblk mystix]

Is this a sale from the owner...or some kind of auction/gov't auction?

[Neo.]

Don't be so quick with the rolley eyes...it goes to whether your low ball offer will be taken seriously. If it's been on the market more than 6 months and you are pre-qualified and can close in 30 days I would hit them at 95K and see if they blink. You make money on real estate when you buy it right.

what would you expect them to counter at?

[CosmicCowboy]

what would you expect them to counter at?

It depends. Who owns the loan?

[Neo.]

Is this a sale from the owner...or some kind of auction/gov't auction?

its not an auction. its being handled by an agent. starcrest realty

[Neo.]

It depends. Who owns the loan?

edit: sorry i was initially trying to respond to another post

its a fannie mae property

[CosmicCowboy]

StarCrest Realty


No. I mean who OWNS the note they foreclosed on. If it's Fannie or Freddie you may see some wiggle room.

[Neo.]

No. I mean who OWNS the note they foreclosed on. If it's Fannie or Freddie you may see some wiggle room.

fannie. sorry i thought i was posting to someone else at first.

[CosmicCowboy]

edit: sorry i was initially trying to respond to another post

its a fannie mae property


OK...it's gonna depend on the original note amount, the amount still due, and whether there is mortgage insurance in the picture to take some of the hit. I'd submit a written contract at 95K. They HAVE to take it to the seller. You might be pleasantly surprised.

[Neo.]

OK...it's gonna depend on the original note amount, the amount still due, and whether there is mortgage insurance in the picture to take some of the hit. I'd submit a written contract at 95K. They HAVE to take it to the seller. You might be pleasantly surprised.

just for my own reference, why is it that you suggest a fannie mae property would give me more wiggling room?

[coyotes_geek]

Primary residence for the time being.

Then I'd say it depends on how much you time you have/want to have on your side. If you're in a hurry to get in a house, or worried that a higher bidder might come along, just start at the $105. If you don't mind waiting it out for a while and think the couple grand you might be able to save is worth the risk of someone else beating your offer, then go $100 or maybe even lower than that. You're really not talking about that big of a spread here.

[CosmicCowboy]

just for my own reference, why is it that you suggest a fannie mae property would give me more wiggling room?

They are under political pressure to get property off the books and cash in the bank. Plus, it's all funny money to those guys...when you are billions in the hole whats another 10K...

[Neo.]

They are under political pressure to get property off the books and cash in the bank. Plus, it's all funny money to those guys...when you are billions in the hole whats another 10K...

gotcha. its been on the market for around 2 months, and they just dropped it from 121k to 110k on April 1st. should I still shoot that kind of a lowball offer?

[CosmicCowboy]

gotcha. its been on the market for around 2 months, and they just dropped it from 121k to 110k on April 1st. should I still shoot that kind of a lowball offer?

I would, but you have to factor in the risk factor if you have fallen in love with THIS specific property. Someone else may make a higher offer while they are considering yours. Otherwise, all they can do is say yes, no, or counter-offer and you can decide what to do then.

[CosmicCowboy]

gotcha. its been on the market for around 2 months, and they just dropped it from 121k to 110k on April 1st. should I still shoot that kind of a lowball offer?

Plus, remember that on Fannies "list" now the asking price is 110K. It won't necessarily show the markdown. Your offer at 95K is within 13% (86.36% of the asking price to be exact) so isn't really that insulting.

[Neo.]

good stuff. thanks.

[silverblk mystix]

FYI...

I was in a similar situation when I bought my house...it was a gov't foreclosure and the numbers were similar...(neighborhood values higher-price low-instant equity as soon as you move in)

but we lost out on 4 or 5 similar deals because we were trying to bid low and grab a great deal...

The last house we tried for was in a really nice neighborhood...the house was only in need of minor things and/or a paint job, and the area was known for selling really fast.
The agent told us that another couple had also missed out on the last 3 or 4 houses by bidding low and the last bid they lost out on...they actually bid 1,000 OVER the asking price...
we bid one-thousand three hundred OVER the asking price because we felt they were going to add a hundred or two hundred over...and we were right...we actually paid 1300 over the asking price and we did beat the other couple by a couple of hundred.

We moved in with instant equity and got the Obama mortgage credit (8,000 at closing and 2,000 a year in a mortgage credit tax return every year for 30 years!) We painted the inside and the outside and still had cash left over...not too bad for our neighborhood.

That is why I asked if it was a gov't auction or a gov't foreclosure--because if it is there are people out there who are looking for deals like this and will try and win the bids and turn over the properties asap and find other deals and turn them over again....

So depending on the neighborhood and how much or how bad you really want this particular house...I would recommend not letting the thirst for a great deal get in the way of landing the house you fall in love with. It is already a good deal to have instant equity in this market and trying to go to a rock bottom price might backfire.

Good luck.

[Neo.]

hmm... lots to consider...

[CosmicCowboy]

Things were quite different with the tax credits. Market has cooled WAY down since then.

[CosmicCowboy]

There are over 13,000 homes for sale in SA and right at half of them are foreclosures. Average sale price is 105K.

[Neo.]

Things were quite different with the tax credits. Market has cooled WAY down since then.

Yeah, that's kind of what I am thinking as well. I'm still a little afraid to lowball that much though... :downspin:

[Neo.]

There are over 13,000 homes for sale in SA and right at half of them are foreclosures. Average sale price is 105K.

I'm in Plano, TX fwiw

[CosmicCowboy]

I'm in Plano, TX fwiw

Ouch. Your market really sucks. Home values have dropped 10% in a year with no end in sight.

http://www.zillow.com/local-info/TX-Plano-home-value/r_53915/

[Neo.]

Ouch. Your market really sucks. Home values have dropped 10% in a year with no end in sight.

http://www.zillow.com/local-info/TX-Plano-home-value/r_53915/

So are you thinking I should go ahead and shoot the lowball offer right off the bat and see how they respond?

[CosmicCowboy]

I would...Plano has 2000+ listings and 5 recent sales.

[Neo.]

I would...Plano has 2000+ listings and 5 recent sales.

K. I intend to get the offer in today, so hopefully things go well.

[Wild Cobra]

purchasing a home - how to proceed?
Wait for the prices to come back down to a reasonable level. Currently, there's more than a years supply of houses, but nobody is will to drop the houses to a reasonable supply and demand market rate. Last time I looked, houses were still at a nominal 30% over priced value from what the natural trend would have been, had not this "housing flip" fad never happened.

[Neo.]

Wait for the prices to come back down to a reasonable level. Currently, there's more than a years supply of houses, but nobody is will to drop the houses to a reasonable supply and demand market rate. Last time I looked, houses were still at a nominal 30% over priced value from what the natural trend would have been, had not this "housing flip" fad never happened.

I doubt that the prices will be coming back down to "a reasonable level" anytime soon, if ever. It's about as likely as gas prices dropping to "a reasonable level". It may drop a slight bit, but will never significantly drop.

[CosmicCowboy]

Wait for the prices to come back down to a reasonable level. Currently, there's more than a years supply of houses, but nobody is will to drop the houses to a reasonable supply and demand market rate. Last time I looked, houses were still at a nominal 30% over priced value from what the natural trend would have been, had not this "housing flip" fad never happened.

Texas didn't get caught up in that shit as bad as the west coast...I think we are approaching the bottom of our market...Prices in San Antonio are actually rising.

[Sportcamper]

Neo Dude…
1- Real Estate is not a game for amateurs…It sounds like you don’t have a knowledgeable real estate agent representing you….The questions that Cosmic has answered for you are things the buyer of a foreclosed property should already know…
2- Have pre qualification documents in order…Present them to the bank with your low ball offer…I have presented two offers on properties in So Cal which the banks snubbed….Only to have them contact me up to a year later to ask if my original offer was still available…
3- Low ball...The ball is in your court...Years ago I made an offer on a home for 40k below asking price…They had offers for asking price but with all sorts of contingencies…The owners needed to move on & they accepted my clean offer with lots of bitching & moaning…If it were me, I would put an offer in for maybe 90k with documentation that you are a clean pre qualified buyer with no strings attached…If they say no move on…In my area the prices of homes keep falling…You are not missing out on the deal of a lifetime...

[Wild Cobra]

Texas didn't get caught up in that shit as bad as the west coast...I think we are approaching the bottom of our market...Prices in San Antonio are actually rising.
That could be true. Of course, when I said "nominal," that didn't mean everywhere. The market here still sucks. People here started asking more for old houses than what a new comparable house with better insulation could be built for.