For the lower price-points, on single family residences in respective communities, I can say with total confidence that banks will flat out not accept FHA offers, and even 20% down offers have relentless competition. I'm seeing most sellers hold out for the highest price they can get, often above fair market value, and then deal with it later if it doesn't appraise.
For this reason, among others, banks and other sellers seek all (or mostly) cash buyers as their first choice, because lender approval will not be a deal-breaker. They have been able to do this with relative ease, because they're getting 10+ offers within days putting a sign up.
The lower-end markets have been greatly impacted by government and banking actions that have created an artificial short supply. With such a short supply, and such a great demand, investors and mostly cash buyers are sweeping up the good deals. The rest of the first-time home buyers are considering themselves grateful for opportunities to scrape up what's left over.
For mid range homes, you can get fair market value with 20% down, but still need a healthy down payment fi you want to compete.
For high-end homes, you can't qualify with less than 20% down, and more in most cases... but here, the buyer is king as the top end of the market is flooded with supply.
The information provided by the other agents is right on target. I list and sell bank owned properties direct and the banks are pricing their foreclosures just below fair market value in order to move them quickly. I usually have several offers the first day the property hits the market and have seen properties being sold for over $45,000 of list.
If you are interested in receiving up do date informaiton on foreclosed homes please feel free to send me an e-mail via my website and I'm happy to arrange.
http://www.downtownREOs.com OR http://www.foreclosures4sale.listingbook.com
John & Sarena Villaescusa
1) Pricing (is the property priced below or above market?) Usually banks price them below market so they can get several offers.
2) Location (good, bad, decent area?).
3) Demand (how many offers are already on the table? Are there other similar properties available? etc.).
4) Condition of the property (this of course in relation to pricing). Any cracked slabs, code violations, etc.?
5) Has the property been sitting on the market?
6) Financing available for the property (FHA,VA, Cash Only, etc.)?
As you can see, there is quite a lot to look at. This is the reason you want to seek a RE professional who will do the homework for you beforehand. Also, real estate just like everything else is a relationship business and the right agent will know how to get your offer accepted by the relationships he has built and his tenacity to connect with the agent representing the property.
The 2 "distinct" elements he is talking about to beat higher bidders are:
1. Are you paying in cash & how fast can you close
2. If you are financed, in my past experience there can be no reasonable cash offers on the table and they usually want the highest down payment (direct relation to qualifying and guidelines)
If your offer contains financing contingencies, plan on paying above asking price unless the property has been sitting. Remember, NO assett manager will accept an offer in the first 3-5 days of listing the property as they want to see what the market will bring to the table.
Second, most banks will simply lower the price rather than tool around with a low ball offer. These banks have a huge pile of cash they are sitting on (thanks to our government). Did you know that on an average foreclosure in CA it takes $30,000 a year to maintain it with carrying costs. That is a drop in the bucket for them. Unless the property is just detroyed or has been sitting on the market for 100 days plus, they are in no rush to negotiate. It is black and white...
the banks will take what is necessary to fulfill their Profit and Loss. I am an Asset Manager and Broker here is San Diego. I represent many of the major banks and you will want to work with a good agent who understands the process. Thans
The banks want to know the buyer will close the deal.
The best thing to do would be to have your agent comp out similar properties so you can get a "rough" number in which to submit your offer. If you are looking for to find deeply discounted homes, there are 4 key areas in San Diego in which you should focus. There is also 2 distinct elements to your offer which will allow you to win properties over higher bidders.
Primarily, most TRUE REOs are priced below fair market value when they hit the market, as the banks are hoping to generate HIGH interest, and let the price go up from there.
Again, with no set standard, the best way to determine your price is to find a good agent, and have them do a FULL Comparable Market Analysis (CMA) on any home you are writing an offer on. The benefit to buying right now is that money is cheap to borrow, and prices are low, so bidding "low" isn't always a good idea....but it always depends on the situation.
Basically it depends on the Area and your Price Point. Some areas have had a higher demand in San Diego County than others. Lets use Poway as an example. During the last year when we've had clients looking at houses between $350,000 - $450,000 there seems to be well over 30 + offers on every house we put an offer on. We did find homes for most of these people of couse, but it takes constant observation of what is coming on the market, price reductions, status changes and trying to be one of the first to put in an offer to try to get good positioning. Because this price point in the Poway area is so hot right now people are paying more than they would expect to pay for REO's / forclosures and short sales. The higher the demand, the higher the price. Some REO's and short sales even go for the same as a regular sale. If there is enough demand on a particular property they can even go higher. I certainly don't want to scare you away, but we like to be very direct and give you all your options so you can make an informed decision. It's a great time to buy, especially since they most likely extending the First Time Buyer tax credit.
Give us a call and we will check out the area you are looking at, let us know what you want to spend, what yours goals are with the purchase, your family residence, an investment, ect... We will let you know what properties have sold for recently and we will start working on finding you what you are looking for.
We look forward to hearing from you.
Pacific Beach Realty
Marcelo A Campos
Pacific Beach Realty
Lic # 01260114
CHECK OUT MY WEBSITE http://www.SanDiegoBuyingRealEstate.com
The bottom line is simple, fair market value based on the condition of the property. Let the comparable sales for like properties be your guide.
Lastly, when pursuing bank owned listing, do not get attached to any property. You must learn to approach it as business decisions rather than a standard home purchase. It saved you lots of stress and potential heart ache.
Mark and Kari Shea
Real Estate Experts Serving San Diego County
Investment, Foreclosure & Short Sale Specialists,
Development Opportunities & Traditional Real Estate
Let me know if I can help you in any way!
Joan Wilson (Realtor, SRES, Ecobroker)
California Cool 4 Sale
Prudential California Realty
Direct Phone: 760-757-3468