Hello Mary Ann,

Currently, I am working with a VA buyer and have found Va loans along with FHA loans have become more frequently used and accepted by banks. However, each property is different. Have a Realtor provide you with research about the property that you would like to make an offer on to make a more sound decision.

Make it a great day!

Laura Kelley
REALTOR
Keller Williams Realty
619-985-3362
www.LauraSanDiego.com

Mon Aug 11 2008, 22:17

I have 4 REOs in escrow...two are for VA buyers - one in Oceanside and one in Vista - who had been looking for quite some time and had not been having success until we met. Since VA is 100% financing and the sale is subject to a VA inspection, many REO sellers/agents seem to be hesitant to take a risk on a VA offer....you will need to find a full-time agent who is willing to work very hard to find you a great deal. It's definitely doable....but it will take a lot of work and commitment on your part. Short sales.....only 11% of those available in SD county have actually closed in the past 6 months. Completing one with VA financing will be even more challenging because often times, the Sellers strip the place of all appliances before they move out and do not have the financial means to complete any repairs. Remember....you are dealing with a Seller who is in extreme financial distress, so there are no $$ available.

Fri Aug 8 2008, 21:02

Mary Ann:

The answer changes based on the property. What you have to remember is that the "asking price" (AP) does not have to be even close to the "fair market price" (FMP). It can be greater or less than FMP and this will determine where to bid. Once you know the FMP then an offer 10% below that could be successful if, for instance, the home has been on the market for a over 30 days, there are 4 of 5 similar properties for sale in the area, there are 5 or ten homes in default in the area (either listed as short sales or just heading towards becoming REO's). With a short sale, the same basic market forces are at work, although much more slowly, as the average short sale approval cycle is 45 - 90 days.

The trick is to work with someone who knows your market and stays on top of homes that fit your parameters. I have known people who have picked up great deals (55 to 65 cents on the FMP) because they could look past a little bit of dirt and a some holes in the wall. Most people are looking for that "move in ready" home. Being willing to put in some elbow grease, paint, and / or flooring removes much of the competition and allows you to get a great deal. Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty

Fri Aug 8 2008, 17:33

You got some great advice below, especially regarding the relative ease of purchasing an REO rather than trying to do a short sale. We've typically seen savings between 25-30% in your area on foreclosure home purchases, so bidding 10% (or in some cases, even 20%) below list price isn't unreasonable.

Two things to keep in mind:

First, it helps to know what you're asking for a discount FROM - in other words, what did the property last sell for...how much did the bank take it back for...what's the average price depreciation in the neighborhood...a Realtor can often help you come up with that information.

Second, it helps to know how much foreclosure activity there is in the area, and how long the property you're interested in has been on the bank's books. I just did a quick search on our site and found almost 700 foreclosure properties and almost 550 bank-owned homes in Chula Vista alone; that gives you tremendous negotiating leverage when dealing with the lenders.

Good luck!

Fri Aug 8 2008, 11:10

Hi,

If you happen to look at condo's, townhouses or PUD's, make sure that it's VA approved.

Rob Chomentowski
Sr. Loan Officer
Affinity Financial
858-922-7899
www.affinity-financial.com
rob@affinity-financial.com

Fri Aug 8 2008, 10:57

MaryAnn, I would highly recommend looking at REO's (bank owned foreclosed properties) rather than short sales. Short sales can be a nightmare and are very risky. No guarantees you'll even get the property, yet you are still required to do your due diligence i.e. conduct your home inspection, which will cost you, etc. I've been working with a lot of buyers looking for bank owned properties and we've written up a lot of offers. I don't know about your area, but here, the are going for asking price or over asking price. My clients have been quite discouraged. These properties are being priced very well so as to attract a lot of buyers and they are successful at it. I'm waiting for this buyer pool to dry up so that my buyers will have a chance to get something into escrow! And they are not making low offers - they are making at least asking price offers. Unfortunately the good ones go quickly. My guess is to bid 10% under asking won't fly - these properties are being agressively priced already since the banks are not in business to sell homes, they want to unload them as quickly as possible. Your market may be different?

Were you also aware that Bush signed a housing bill last week that aims to help first-time home buyers?
First-time home buyers can get up to $7,500 tax credit if you buy a home between April 9, 2008 and July 1, 2009. This is an attempt to stimulate home buying in what otherwise is considered a down market - basically means you get a 0% loan for 15 years! Definitely something to think about!
If I can offer any more help, let me know. By the way, where are you looking to buy? Let me know.
Thanks, Cynthia

CYNTHIA J. FLEMING, Realtor®
COLDWELL BANKER RESIDENTIAL BROKERAGE
Laguna Beach South
31582 Pacific Coast Highway
Laguna Beach, CA 92651

Business: 949-499-8791
Cellular: (603) 216-7906

Finding you a place to Love ... not just a place to Live!

Fri Aug 8 2008, 10:02

Your chances of getting a property will be different with each one you bid on. In some cases it may even be prudent to bid more than 10% of the listing price. These are strange times, with a lot of distressed sellers out there. Every offer should be taken seriosly.

Good Luck

Fri Aug 8 2008, 09:56