Home Buying in Joshua Tree>Question Details

Woodyc, Home Buyer in Joshua Tree, CA

does a pre-foreclosure house sell for the advertised balance?

Asked by Woodyc, Joshua Tree, CA Sun May 2, 2010

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4
Hello Woodyc,
Very often the list price on these homes has very little to do with what the home will actually sell for.
Because there is no guarantee that the bank(s) that have liens on a property will cooperate to allow a sale and it can take many months for them to decide to even say 'no' the listing agent has to entice buyers to look at such properties and offering prices lower than the comps to get them noticed is usually the way they do it.
Part of the short sale process is that the banks involved (lien holders) will get BPOs (Broker Price Opinions) so they will be aware of the properties value. They will accept offers lower than market rate but it has to make sense for them. If they will make as much or more foreclosing they won't accept your offer.
If you do find a property that you are interested in that is a short sale/pre-foreclosure have your agent run the comps to determine a fair price, especially if it is in good condition and in a desirable area; even if that price is higher than the list you will have a realistic chance of getting an approval.
Have a great day!
Trevolyn@century21.com
lic.#01444353
1 vote Thank Flag Link Sun May 2, 2010
In todays market homes are rarely selling for anywhere near the amount owed to the lenders, that is why they are in the foreclosure process or an alternative, the short sale process where the lenders will agree to a price well below what is owed in order to recover as much money as they can. Many properties in the hi desert areas of Yucca Valley, Joshua Tree and 29 Palms are selling for 50% or less of what had been owed on them. The lenders prefer the "Short Sale" process to a foreclosure because they recover 15 to 30 % more than if they foreclose and sell them as bank owned. Plus with most short sales they still have an ocupant in the property to keep it secure during the process. Most Realtors have access to comparable sales information to give you a ballpark idea of what a property might sell for. If you provide us with an address or an assessors parcel number A.P.N. # OR AN m.l.s. number if the property is being advertised we can help you determine what the property is likely worth, tempered by its condition. Short sales can take some time to complete especially if there are more than one lender involved or if a mortgage insurer or a federal agency is involved i.e. Freddie Mac or Fannie Mae that need to approve the deal. Hope this helps, Wayne Stamm, West Coast Realty & Assoc. (760) 887-3997
0 votes Thank Flag Link Wed Jan 16, 2013
Hi Woodyc,

It all depends on the listing agent. If they are ethical and priced it close to market value. Since there are not that many Foreclosed or REO properties, there are buyers submitting offers up to $40,000 over listed price. At times buyers submit offers with exaggerated offers and when the buyers lender come back with the low appraisal, the seller and seller's agent negotiate with the bank or beneficiary to purchase it at the the appraised value. Although some agents are up on the game and add a clause, that the buyer comes up with the difference of the appraised value.
To make a long story short..... It all depends on how many offers are submitted. Always submit highest and best. It's not the time to low ball (let me tell you that, LOL).

Best regards,

Jes Sierra, Realtor®
Century 21 Beachside
Chino Hills, California
DRE# 01772408

If this helps, give me a thumb up.
l
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V
0 votes Thank Flag Link Sun May 2, 2010
I give Thumbs up for Trev's answer.
If you think about it, why would the listing agent suggest a price higher than what the value is? You can rest asssured the value is there. But there are so many possibilities and facts hidden. How much is owed versus value? How severe is the hardship? Condition of property is almost always wanting, making it worth less than current market value. Can it be had for less, is what buyers want to know. If you can learn what the loan balance is, it helps. If that is more than the value, the bank will have to decide how much they will allow themselves to loose. One thing all have in common, the first offer that goes in, often has a chance for acceptance by bank, if it is close to value. Only after it receives the first offer, will the bank ask for a BPO, in order to see how much they will loose. If offer and BPO are close, excellent chance for acceptance. Where things bog down is, the first offer is low, too low, foolishly low. It gets in first, no one can block it, it must be submitted to bank. All other offers, better and logical, have to wait for the first one to be considered. A good listing agent is the key. Fair price to begin with, avoiding as much as possible a low blocking offer, then diligent with the offer and dogging the bank to take action. So many parties have no experience in this process and they can get in the way. A specialist can build relationships with bank processors and get it done. In NJ, attorneys are used for listing and buying. I know of one who concentrates on just this. He gets it done when others struggle. Banks still can be under staffed for all this. Patience is required and that brings up, why go through all this as a buyer? Depends on the local market. Some places- Detroit, CA, FL, others- there is so much stressed property that list price means very little. Other markets, banks hold out for close to market value, such as NJ. And some parts of NJ at that. Carl
0 votes Thank Flag Link Sun May 2, 2010
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