As a Realtor specializing in the San Diego foreclosurs, also known as REOs or Bank Owned Properties since the current housing crisis started in 2007, I wanted to share some
practical real life information tips on purchasing bank owned homes.
I will break it up into a couple segments.
Pricing of San Diego Foreclosures, as in any area can
be challenging and of course is the biggest benefit of working with Foreclosure
properties.
The
biggest mistake buyers make is placing a low-ball offer. The media is always
talking about it being a "Buyers Market", which is true in how
affordable houses have become to substantially more people than before, but
then there are also more people to compete with in purchasing the now
affordable home. The large discounts the media is talking about is off the high
values from the peak of the market in 2005-2006 not the current list price. The
current list prices on the market have already taken in account the discount so
you can't then apply another discount on top of the house's currently listed
price. Many buyers typically lose out to higher offers on a house or two before
they start making realistic offers. Especially right now all over San Diego County from Alpine houses to College Condos, banks are receiving offers above the asking price.
Another
common mistake is when there are repairs that need to be done. Sometimes people assume
they can take the cost of those repairs and subtract them from the listed price
to then come up with the offer price. Generally the condition of the house is
taken into account when pricing the property. A better strategy to make sure
you are getting a deal is to decide what the value of the home would be once
all fixed, then subtract the cost of the repairs and adding in a premium for
your time and efforts into getting it there. Sometimes you can then take an
additional percentage discount off the top, you should be working closely with
your agent to decide on the correct price.
Smart Asset Managers from the banks list the
house at or slightly below the market creating lots of interest and therefore
potential for the house to go at a higher price than the market is currently
paying. If your agent is not looking at recent sales in the area, you could be
losing the house to someone who is willing to pay the right price or worse yet,
over-paying for your new home, because you had to outbid multiple offers.
While
many houses are under or accurately priced, the largest holder of foreclosures
right now, FannieMae, tends to over price their inventory because their
financing doesn't require an appraisal and they usually put new paint and
carpet in making them look better than most others on the market.
If
the house is truly over priced based on actual market numbers, rather than your
perception that all housing is over priced, don't walk away. Place an offer at,
or slightly below the price it should be. Many times that keeps other serious
buyers from placing offers. After a couple of weeks they have to lower the
price and your offer is already before the others who are now attracted by the
lower price. If it spends too long on the market
without an offer, the bank gets desperate and
may even take a lower than market price. I had a buyer pay 85% of market value
(foreclosure, not retail) for a Rancho San Diego Condo foreclosure, with just such a scenario. Discuss with your agent
the best strategy for the particular house you want to purchase.
Recently we sold a FannieMae foreclosure in Alpine for almost $40,000 over what another Traditional Sale was trying to sell for in the same development and same model and there were no other offer that they were competing against. The buyers paid the higher-than-market price listed by FannieMae because the agent representing the Alpine buyers had not taken the time to research the actual value of the house.
Bottom Line: Make sure both you and especially your agent it doing your due diligence to make sure you pay the best price possible.
Santee Bank Owned Properties
Alpine Bank Owned Properties
Rancho San Diego Foreclosures
College Foreclosures
La Mesa Foreclosures
Chula Vista Foreclosures
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Rachell Lara of the Gold Star Group, specializing in getting you the right house for the right price.
619-316-7445
Rachell.Lara@gmail.com
www.LaraProperties.com
