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Your realtor should help you with this stuff. I might be wrong but I didn't think there was much wiggle room in the price with a foreclosure?
Well we're hoping there is because it's a rural property and the 1/4 mile driveway needs to be put in, they just drove through the grass, and there's no outdoor steps to the house just cinderblocks but it has potential and a great view
Typically banks list foreclosures at "fire sale" rates, meaning they are already priced to move as compared to similar properties in the area. Unless the property has been on the market for a long time with no offers, I would probably go in close to asking price.
My understanding with foreclosures is that are often priced at the lowest value the bank is willing to accept and that they are sold as-is (ie the bank doesn't care if you think it needs a driveway or front steps).
you won't get anything making an offer at 80% because the bank has the right of set off - meaning they can bid the asking price and not pay a dime because they hold the mortgage.
This is all so confusing....To be honest it's expensive for a foreclosure and needs a lot of updates, but we like the location and size and are willing to do the updates needed. However, we're not willing to pay that price and still have to do all the updates. This market sucks!
@Ireland: The term "foreclosure" has nothing to do with the condition of the house... It means that the owners defaulted on the loan and often the asking is about what is left on the loan.
Now, often foreclosures are in rough shape... owners are allowed to take anything not a part of the home... and often they beat it up on their way out because of how mad they are...
We bought one... and there were others in the neighborhood for the same price in far less better condition than ours... sometimes you just have to find the hidden gem....
When we were looking for a home, I refused to even look at foreclosures. Horrible Feng shui.
@Ireland: Offer them what you feel comfortable offering. They may counter or they may take it. If you're serious about this house, offer. My dad offered a bank 75% on his current house and they took it.
We bounced back and forth with the bank on our house and it was a foreclosure. They're initial asking price was $85k and we ended up getting for $80!!
we put in an offer today for a foreclosure. We offered way below asking price. We figured we'd start low. We have our "top dollar" noted and will go as high as that. We are waiting to hear something. It is confusing...& in this market you never know. There was another foreclosure in the same town as the one we are bidding on... bank was asking 80k and it sold for 15k. So, you NEVER know. Good Luck!
Foreclosures that are in good or decent shape in our area go in days at asking price and above. We have offered on two foreclosures 1. Was offered asking price and we would pay closing costs 2. We offered $2,000 above asking price and we would pay closing costs and we didn't get either.
Your real estate agent should know what the houses are going for in your area and be Able to give you a suggestion at what will get you the home. I know Fannie may and Freddie Mac homes offer closing cost help if it's one of these homes. Good luck!!!!!
We bought a foreclosure almost 2 years ago, so still in a very crappy economy and they wouldn't budge on the price really. We looked at a lot of houses and a lot of them were foreclosures. Most of them were in bad shape but the one we ended up getting was perfect! So sometimes you have to find the diamond in the rough. Ours was listed at 75900 and we offered just under at 74k plus closing (it was defaulted on for 160k). They countered full price with closing and we accepted. Our realtor said it was unheard of for a bank in this economy to accept an offer that was 5% lower than asking, she was so surprised when they paid 6% closing.
I was under the impression banks determine the price on the current value of the house/land. Normally that would not include updates that a buyer would want to make.
Back 15 years ago my dad bought our house for 75k when the bank wanted 150k and it was a foreclosure in the same town i live in now. So I think times have changed a bit. But good luck!
We put an offer on a foreclosure as well. Our house is similar to yours in that it needs a lot of work (the owners really did some damage when they moved out). However, a lot of other people saw the potential too, and bid on it. We were in a multiple offers situation from the get-go. We put in our highest and best offer, and that's all that we could do. That's what I would suggest... we didn't offer full asking price, but if you love it and want it, then the best you can do is make your highest offer. (Ours actually got accepted after the first contract fell through, so it worked for us!)
The only thing you can really do is offer and see what the bank says. If you feel it's overpriced (and the comps in the area support this), they might be willing to come down some. It really just depends how long it's been sitting and how many offers they've had. At the end of the day, you should never pay more for a house than you feel comfortable spending- that's what got us into this situation in the first place.
I offered full asking on the foreclosure I bought last year, but asked for them to pay closing, put in a new A/C (the outside unit had been stolen) and a new hot water heater. They not only accepted, but put in a whole new HVAC system and 2 new hot water heaters. I know this is super rare, but they wanted to sell!
I am no expert, but I watch a lot of HGTV and I thought that short sales were the ones where the price is 'take it or leave it' and a foreclosure just means the owner has no choice but to sell and the bank calls the shots regarding the sale price, meaning they will still negotiate like the owner would have. But that's a really good point about being careful about the condition of the house, the owners usually take everything of value and sometimes intentionally cause damage out of anger.
I'm looking at some foreclosure listings and it's frustrating because they never show any pictures online, you just have to go and see it.
Thank you all for the advice. I guess I should just throw the price out there....it's 145,000 for 37 acres and a 3 bed 1 & 3/4 bath. It's about 30 miles from the nearest "city" and 9 miles north of a tiny town. Basement is not finished, we have to put in our own driveway, right now it's just two ruts up to the house for tires of the car. We saw one hole in the siding, looked like hail damage but the rest looked intacted.
Does it seem to be worth the price they are asking?
I have no idea if that's a reasonable price since I'm not in South Dakota. Factor in what you think it'll cost to make all those repairs though.
We only looked at one foreclosure, everything else was a short sale. I think the foreclosures are being held back from the market in my area because there would just be too many of them. And short sales were the worst. Some of them looked as awful as you might imagine a foreclosure to look.
@chittychittybanebane: I don't believe so. I know that we can have horses if we want and it's in a development of sorts...ish....but there's no HOA or rules that we can find and it doesn't look like the development does much of anything....
We were looking at houses with like 5 acres, and I started to thinking about our whole weekends dedicated to mowing , trimming, weeding, cleaning...etc so we stepped away. That is ALOT of land...but if only an acre or 2 you need to really maintain, that is awesome! I think it sounds like a great deal. My FI says to pour a drive way is super cheap and easy too... Do you know a contractor that could walk through with you? That is what we did on the current house we bid on. It helps, because they know SO much more than we do when it comes to pricing and time frames. :) Good Luck. Keep us posted!
So update:
The realtor finally got back to us (24 hours after we left a message, another story for another day) and we told her the property we were interested in and she then took another 3 hours to call us back and tell us that the house was under contract. So because I'm hormonal lol I called BS on that and my husband emailed the lady who listed the property and she emailed back and didn't mention anything about being under contract....So confused
@Ireland: I don't even know what that means. Sigh...I am NO help!
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DH and I found a couple places that are only 100-200 more than our rent; however, they foreclosures and we haven't seen them in person but we're going to look today. I was wondering how little is too little to offer as a first offer on the houses. 80% of asking price, or higher? We're so clueless haha