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Wayne, Other/Just Looking in New York, NY

I have been looking at bank owned foreclosures in San Francisco, and would like to know if the price presented is the final price paid?

Asked by Wayne, New York, NY Mon Sep 30, 2013

I was wondering if there were any other costs involved in the cash purchase of a bank owned property.

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Are you looking for a bank owned property because you believe you would get the "best" deal on a property? As stated previously, foreclosures are not necessarily great opportunities. Depending on your goal (investment property, long-term/short term turnaround, etc), there are targeted properties which make more sense. I don't think this answers your question, but yes, there are always other costs and nothing is ever the final price, everything is negotiable..
0 votes Thank Flag Link Mon Sep 30, 2013
Bank-owned real estate [REO] is listed at or near market.

The bank did NOT purchase at foreclosure. It simply took the property back because prospective buyers concluded that it had little or no equity, relative to market value, and so no one submitted an acceptable bid.

Stay away from foreclosures unless you are a pro ….. in which case you play in the pre-foreclosure market, not in the REO market.

Leopold A Rodriguez
400 Montgomery 505, San Francisco 94104
Office: 415.781.3000

Single Agency Broker 00849905
Attorney at Law 43062
0 votes Thank Flag Link Mon Sep 30, 2013
That depends on what you mean by final price. The price initially listed is negotiable and banks will sometimes accept a lower price, but not one that is too low. The costs associated with a bank owned property in San Francisco often include the following other costs:

1) Closing Costs. The buyer typically is responsible for closing costs which run between 2-4% of the list price. The Bank will sometime cover some or all of closing costs, but again this is a negotiation. Sometimes the bank will also just tack on the closing costs to the asking price. My feeling is that it never hurts to ask for closing costs.

2) Deferred maintenance. Many of the properties go into foreclosure because the owner can not afford the mortgage which often means they can not afford to maintain the property and when they are going to lose the property a lot will stop maintaining the property properly as they know it is going to the bank.

3) Liens. Often times there are deferred tax payments, potential mechanic's liens (ie a contractor who did work to a property and has not been paid yet), or other liens against the property for the same reasons as mentioned above. Although the bank will usually bring the taxes current, it is always a good idea to carefully go through the title and make sure all taxes and liens against the property are current.

Greg Bryan
GB and Associates
(415) 640-4341
0 votes Thank Flag Link Mon Sep 30, 2013

Are you looking at foreclosures listed with a Realtor or talking about buying at auction?

If at auction you will need all cash, be bidding against veteran investors, the price will be the highest bidder, you could have issues with clear title, and you won't be able to do inspections.

If you are talking about properties listed on the MLS none of those things apply, but the final price will likely be higher as most properties in San Franciso are getting overbids. Additionally, the buyer is responsible for paying closing costs, appraisal if wanted, and inspections if wanted.

Foreclosures are also different in terms of process, so you want someone helping you who knows how to handle them. We have done a lot if you want some info.

Best Regards,

Lance King/Owner-Managing Broker
King Realty Group

DRE# 01384425
0 votes Thank Flag Link Mon Sep 30, 2013
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