Home Buying in Highland>Question Details

Erin, Other/Just Looking in Denver, CO

Why are some Denver homes listed at sales between $40 and 60K? Are these foreclosures?

Asked by Erin, Denver, CO Mon Feb 28, 2011

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As other agents have pointed out, there are homes in Denver listed for sale in this price range, but the majority of these homes need some improvement. These homes are often referred to as "distressed properties." This doesn't refer only to the property's physical state, but also the financial issues that the previous property owners were/are facing.

These properties will often be short sale (not that the process of buying these properties will be short), bank-owned (sometimes called REO), or HUD owned.
-Short sale properties can be a "good" deal, in terms of instant equity, but the process can be lengthy and frustrating and the agent involved should be well-versed in short sales.
-Foreclosure auctions can be a great place to pick up an inexpensive property, but you will be competing with serious investors and, in some cases, financial institutions. You must present cash or secured funds at the time of the auction which limits the number of people who are willing and able to participate.
-If a foreclosed property is not bought at auction, often the bank will contract with an agent to offer it on the open market. Usually the listing price is under market value, but buying a property from the bank (REO) will usually be easier and more like buying a traditionally marketed property.
-Lastly, there are HUD owned homes. This process is more involved with longer timelines than REOs, but usually shorter timelines than short sales. The sale starts with a closed bidding process, then after the bid is accepted a closing date can be established. Your agent should have some knowledge of the HUD process as it has changed for this year.

Past the "good" deals on the distressed market, there are many homes offered for sale by individuals, some of which are offered at low listing prices. Remember the old adages for all of these "cheap" homes: "You get what you pay for," and "Caveat Emptor - Buyer Beware." If you aren't scared off by fixer-uppers, then you are looking in the right places when you look in the under $100K price range.

Spencer R. Madison
Your Castle Real Estate
1 vote Thank Flag Link Wed Mar 9, 2011
There are many good deals right now in the Condo market. Most of them in this price range will need some work. Some are in foreclosure.
My website has a link where you can search the MLS (Properties page) for more deals in the Denver area.
I have personal renovation, fix up experience and can help give you perspective and assistance.
Web Reference: http://www.denverlohi.com
1 vote Thank Flag Link Wed Mar 9, 2011

When you say sales, I am assuming you are saying foreclosure auctions. These are generally private sales auctions via Williams, REDC etc.

There are generally a couple of items at play in these transactions. One is a low opening bid usually generates a lot of up bidding activity and if the house is in reasonable shape, but sold as is, the price will get close to the last actual price it was listed at. Some will not take the opening bid as the final sales price, but you should count on it for planning purposes. Many auctions require cash/certified funds or loan approval up to your bid amount before you can enter the bidding process. It will have to close in a short period of time from the auction (30 days or less). They are no out, no inspection offers, so if you don't do your due diligence, you can buy a "money pit".

If you do your homework, you can get some deals at auction. It is not for the faint of heart.

If you want to learn more about investing in Colorado Real Estate, we have a book we published for 2011 that deals with most types of investing in Real Estate. Let me know if you would like a complimentary copy.

I hope this helps,
Web Reference: http://www.georgelewman.com
1 vote Thank Flag Link Thu Mar 3, 2011
Hello Erin,
Just to clarify, these are not sales.

They likely are foreclosure auctions, in which case the asking price is not listed. The minimum bid is stated. I looked at a Longmont property over the weekend that is listed in this way.

Hope that helps.
0 votes Thank Flag Link Wed Mar 16, 2011
Very leery, I would be, Erin.

Just looking is fine, though. And questions are encouraged.

If you have a specific question on a home and the listing agent is hard to reach, other agents will assist.

I suspect there is something amiss here. Sometimes, an ad comes right out and calls it a scrape. That means the structure needs to be razed.

Without more information, I would have to guess.

I encourage questions because I like working with informed buyers and sellers.

With a home priced way under the market, I would be direct and ask what's wrong with it. The perception is the banks are doing deep, deep discount sales. Foreclosures put pressure on the market, but no one is giving away a home at that kind of price unless there is something seriously wrong with the property. In fact, the banks are sitting on properties until they think they can fetch a better price. There are a few exceptions: homes that are tiny and homes in a blighted area.

One of the online news sources carried a story recently about homes being sold for the price of an SUV. You can find the homes in other states where the markets are very depressed. Denver was not one of the cities listed.

Again, however, if you're more than curious, you should call or email a professional with access to the MLS.

PML of Longmont, CO
0 votes Thank Flag Link Thu Mar 10, 2011
For single family homes located in Denver in this price range, they will almost always have serious issues, such as foundation, structural, etc. If you can give me some idea what you're looking for in a home and the general location I can advise you better about the price range. A lot will depend on if you are willing to do some fix up or if you want it move-in ready.

You can set up a search alert on our website that will send you email alerts of new homes on the market that match your criteria. This can save you a lot of time versus manual searching of websites.
Web Reference: http://www.BandyHomes.com
0 votes Thank Flag Link Tue Mar 1, 2011
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