Home Buying in Toluca Lake>Question Details

Lostinla, Other/Just Looking in Los Angeles, CA

Is this a good deal - 300k on a condo short sale appraised at 305k?

Asked by Lostinla, Los Angeles, CA Thu Dec 15, 2011

The condo we put an offer on is a short sale, nearing foreclosure. It was listed at 295k but now the banks are asking for 300k - but we get a delayed closing and all closing costs paid for. Appraisals, by others, recently were at 305k and 325k. We were hoping for a much better deal but are also having a hard time saying no to this.

Any thoughts??

Thank you!

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Answers

10
HI--
If you like and can see yourself enjoying a few years there,--then it's a Great Idea!
If you know now that you'll want to sell it for a profit in the next few months---then look at the numbers.

Good luck and have a wonderful hliday!
Lynn
0 votes Thank Flag Link Thu Dec 15, 2011
Lostinia, I always say this: Unless you are investors only concerned in the highest ROI, a home should be a home first and not an ATM. Sounds like you are happy with the place, like the location and can handle the HOA fees. Have your agent run recent comps to review against the appraisals just fyi and be sure that HOA is in good financial shape. Short Sales are not the "bargain" that some folks think they will be for reasons my colleagues, below, have mentioned. Buyers may find that REO (bank owned) properties provide better opportunity to get that "bargain". No-one can precisely predict what the market will do in the short term but history has proven that a home is a good investment for the LONG TERM. Best of luck!

Risa Liebster, Realtor®
Ramsey-Shilling Associates
818.397.9188
RSLiebster@gmail.com
0 votes Thank Flag Link Thu Dec 15, 2011
Most short sales are not steals, but they do offer a decent discount off of the market value. It depends on a huge number of factors: which bank is involved, how many investors, private mortgage insurance etc... that don't seem to have any bearing on actual value. Their willingness to take a loss will determine the final sale price, not just the appraisal.

The biggest advantage that a short sale may have over a bank-owned foreclosure is the condition of the property. Most REO (foreclosures) are abandoned for some time before the process is complete, and the homes suffer with no care, utilities off etc.... so they should sell for a lot less than market value. They often need quite a bit of work to bring them back to an acceptable level.

I also have a few blogs on my Trulia profile that may be of use to you when considering values on homes. That information is pertinent all across the country.

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com
Web Reference: http://www.JimSweat.com
0 votes Thank Flag Link Thu Dec 15, 2011
I rarely see short sales priced more than 5% under market value in the Los Angeles market (maybe in Iowa, but not here). The only exception is if there is a great deal of deferred maintenance and/or major system problems (foundation, roof, plumbing, etc.). Even if the listing agent were to price it low, just to get an offer and get the process started in order to avoid foreclosure...at the end of the day, the bank's appraiser will still come out to the property and appraise it based on market value, condition and comps. THAT will be what the bank will hang their next counter offer on, regardless of the listing price.

They are pretty much giving money away today, so if you like the home and you can afford it, GRAB IT! You'll regret it if you lose it over $5k. How much will this additional purchase price amount add to your monthly mortgage...stretched out over 30 years? Keep in mind that, statistically speaking, you will most likely sell this home and move to another in 5-8 years. So that extra $20/month x 5 years = no good reason to not buy this condo.

Happy moving!

Jayne Clement
Keller Williams Realty
Cell) 213/309-5005
0 votes Thank Flag Link Thu Dec 15, 2011
The large misconception about short sales is that your getting a great deal, around 20% off the market value. Even if the home is listed below market value and the owners accept your offer, the bank will most likely counter you back at that market price. In the end, you will definitely be saving some money with going with a short sale but the question is whether the amount your saving is of value to you.
0 votes Thank Flag Link Thu Dec 15, 2011
If you really like this condo and can afford it, then you're on the right track to own it.
But, it does not sound like much of a good deal. Get an accurate appraisal along with specific economic trend to sustain a better deal.

Doug Perez
0 votes Thank Flag Link Thu Dec 15, 2011
Thanks all.

We can afford it. The HOA is reasonable and the property is good.

The short sale process has moved very fast due to the upcoming foreclosure.

The only thing is that we thought if we got a short sale we would get a great deal - at least 20% off appraised value. But this is not the case here....
0 votes Thank Flag Link Thu Dec 15, 2011
Hi Lostinla,

If it appraised at $305K and $325K, then that is what the appraisers are saying the value is. If you really want the condo and can afford the payments (and the HOA), I see no reason for you to say no. It really all comes down to if you want the condo or not (if you can afford it).

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Thu Dec 15, 2011
We advise our clients to avoid short sales, and the lengthy buying process is only one reason. Buyers leverage is severly reduced in these transactions and we would rather see you look at bank owned properties (post-foreclosure).
0 votes Thank Flag Link Thu Dec 15, 2011
I would have asked for a CMA,
but the Appraisal trumps that.
I'm not high on Condos with HOAs, but if you are....
What's the HOA fee?
How many of the Condos are rented out?
What's the monthly rent, typically?
How old are the Condos?
What the typical maintenance?
What does the HOA fee cover?
What are the ammenities?

Good luck and may God bless
0 votes Thank Flag Link Thu Dec 15, 2011
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