Home Buying in 01824>Question Details

Chuck, Home Buyer in 01824

I'm looking to buy a foreclosed home in VA. The property assessed at $330k and bank is asking $275. It's been vacant for some time but is

Asked by Chuck, 01824 Sat Feb 20, 2010

in good condition with the exception of the fact that the previous owners took ALL the fixters (including door knobs and faucets) and appliances. Two questions...would I be better off going to the bank that owns the property for the mortgage (they'll make some money off the new mortgage). Second, how much below the asking price is reasonable given the house will needs everything replaced inside...did I mention that they took all the light fixtures too!

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Don Tepper’s answer
Regarding price:

Assessment doesn't matter at all. It's totally irrelevant.

What matters is what the house is worth. That means considering the comps, then subtracting for appliances and other major items. (Door knobs are cheap. So are outlet plates, etc., which a lot of people also seem to like to remove. Depending on what you want to spend for lighting fixtures, it could be anywhere from $25 to $100 per fixture. Not that much.)

So, forget asking price. Forget assessment. Look at the comps. Then subtract the needed repairs/replacements. It's true, as noted below, that banks generally aren't too flexible on an asking price. On the other hand, if it doesn't sell, they'll drop the price. I've heard plenty of stories of REOs--let's say priced at $300,000. Someone makes an offer of $290,000 and the bank rejects it. A month later, the bank drops the price to $285,000. So, if you really want the house, be prepared to go up to the lower of: (1) what the bank is asking, or (2) comps minus repair costs.

It really doesn't matter if you use that same bank for your own financing. In fact, it's much better to go in preapproved. And that way, if this purchase doesn't work out, at least you'll be prepared to make an offer on another home, whether foreclosure or otherwise.

Hope that helps.
1 vote Thank Flag Link Sun Feb 21, 2010
Don Tepper, Real Estate Pro in Burke, VA
Chuck, First of all banks don't give a huge amount of room for negotiation, I believe they like to get very close to asking in most situations. Secondly, it's not a bad idea to get qualified with the selling bank, in fact some banks require that you have a letter from them. Good Luck!
Web Reference: http://www.mdmrealtyinc.com
1 vote Thank Flag Link Sat Feb 20, 2010
If you don't have an agent consider the services--you need to be aware of recently sold similar properties in the immediate area then factor in repairs in order to determine a fair offering price--Assessed value really has no bearing on pricing--keep in mind the bank wants to get as much money back as possible, therefore you can't necessarily assume money off a new mortgage--Having an agent looking out for your best interest is to your advantage.
1 vote Thank Flag Link Sat Feb 20, 2010
I would be happy to help you negotiate a deal on a bank owned home. What are in Virginia is the home located? I am licensed in the state of Virginia, and if the home is out of my area, I can refer you to a competent agent. Please contact me at your earliest convience.
Jennifer Rivera
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Ask me about a rebate for buyers and sellers
Office: (571) 292-5377 ext 112
Fax: (703) 542-4240
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Move4Free Realty, LLC
8405 Dorsey 201
Manassas, VA 20110
Web Reference: http://www.searchnhomes.com
0 votes Thank Flag Link Sun Feb 21, 2010
I would be happy to refer you to a competent buyer agent in Virginia if you could tell me what town/city it is in. A buyer agent could negotiate all of these issues for you. Ellen Friedman, Keller Williams Realty, 617-448-1542 or ellengfriedman@comcast.net. Best regards, Ellen
0 votes Thank Flag Link Sat Feb 20, 2010
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