Home Buying in Maine>Question Details

newbuyer, Home Buyer in Boothbay Harbor, ME

Is buying a home listed at way under appraisal a good idea?

Asked by newbuyer, Boothbay Harbor, ME Fri Jan 4, 2013

We are very new to the idea of buying a home. We looked at a home that is bank owned (has been bank owned for about a year and a half.) The bank bought it for $250,000, it is listed at $299,000. The appraised value is $442,000. We were hoping since it has been on the market for so long that maybe we could offer $225,000 and get it... but are not really sure if the whole thing is a good idea as far as asking price vs. appraisal, etc? (Excuse me for not knowing very much on the subject!

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Answers

7
don't confused appraised value (what the bank will loan money on) with the assessed value - what the town thinks it is worth! those 2 values seldom match and the only one that matters is the appraisal.

As Jeff said, the condition of the house has a lot to do with the value. What shape is the house in? Have you been inside?

We have sold bank owned properties where the price was pretty close to what the bank had it listed at. We have also sold properties where there was a multiple bid situation and the price was higher than asking. without knowing the particular property it is hard to comment.

Your best bet is to work with a realtor. the bank sells the property through a realtor and you should have one too to help you!

If I can be of help, let me know!
1 vote Thank Flag Link Fri Jan 4, 2013
Thanks all for the great answers/help. We have seen the house (we used to know the owners who were foreclosed on, the house was built by a builder), however since the bank has owned it they haven't maintained it. It will need work (which we can do as my husband was a carpenter) but how much work we don't know- it looks cosmetic, but could be more. The appraisal is probably a few years old (I would assume probably done when the bank took it in 2011?) As far as seeing how much the bank paid was all public record- which is where I found the amount of the last appraisal. Appreciate the advice!
0 votes Thank Flag Link Sun Jan 6, 2013
I willshake the foundations of you question:
How do you know how much the Bank has in it, ($250,000)?
(If it has been 1 1/2 years, then public records should have this figure. I understand.)
How do you it Appraised at $442,000? and, When?
Appraisals are very time sensative, and very transaction specific.
I would question almost everything you said.

What you haven't said, is what the House is worth; you haven't gotten a recent CMA.
If $442 is valid, I would bet the farm that you won't get it for $225!!!
0 votes Thank Flag Link Sun Jan 6, 2013
Dear Newbuyer,

Lots of good advice. If you have not selected a Realtor, please let me know and I can help you make that selection for the area also. I am a top producer in the southern Maine area. It sounds like you are excited about a particular property. I can also check the status for you. Let's not wait! Banks tend to price slightly below the market value so they can move the property quickly and not hold on to it for very long.

You can reach me at: CJ Dubois-Cote, Prudential Prime Properties, 207-615-1663 or cindy@prubay.com.

It would be my pleasure to assist you.
0 votes Thank Flag Link Sun Jan 6, 2013
Newbuyer,
Welcome to the home buying experience. You will find great benefit in having an experienced consultant by your side throughout the process. Attempting to solicit guidance from the internet, from strangers who DO NOT KNOW IN FULLNESS, YOUR SITUATION, GOALS, or VULNERABILITIES is not the best idea.
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It should be strikingly clear you WILL NOT buy a home valued at $442,000 for $299,000. Doesn't that sound like it's "TOO GOOD TO BE TRUE!"
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Your real estate consultant WILL be able to explain the sequence of steps that will take place and will be able to quote your response right now..."But it was listed at $299,000 and I made a FULL PRICE offer!"
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Your consultant WILL be able to project what this home will countered to you at and what you must be prepared to REALLY pay as well as the strategy to reach the price point you are able to accept.
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Then comes that 17 page addendum that you MUST sign that says the bank is responsible for NOTHING and you are liable for EVERYTHING. You will find having a consultant at your side to be incredibly important.
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Now, call your agent and present your concerns to him/her. You don't want to proceed by collecting opinions from the internet.

Best of success to you
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us

If you are serious, you need to call.
0 votes Thank Flag Link Sun Jan 6, 2013
Find a Realtor in your area who has experience working with buyers of bank owned properties. Charlene has already talked about assessed vs. appraised value and Jeff has mentioned that condition of the property is going to be a big concern. It is definitely possible to get a good value by purchasing a bank owned home, but your eyes need to be wide open to the process. Every bank is different - some will make repairs to the property; others will not. "As is" is a concept you should fully understand. The banks generally assume NO liability for anything relative to the sale or the property - all burdens are on the buyer to make sure the property is satisfactory and Seller's Property Disclosures contain little, if any, useful information. You will be asked to sign pages of addenda releasing the bank from liability relative to anything and everything. Your home inspections will be crucial. And, your financing needs to be appropriate for the condition of the home, as well. Just get educated about the process and the property and you'll be fine - your answer will become very clear to you in short order.
0 votes Thank Flag Link Sun Jan 6, 2013
There's a whole lot to look at beyond the appraisal... but concerning the appraisal itself, how old is it? Home values have dropped in the last few years and while making a rebound in some areas a new appraisal may be in order.

The condition of the home is of particular concern... how much work does it need? How's the roof, heating, electrical... is there any moisture or mold concerns? Appliances?

Working with a good realtor will help you as well as having a quality inspection after your offer has been accepted.
0 votes Thank Flag Link Fri Jan 4, 2013
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