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Jenna, Home Buyer in Rhode Island

My husband and I are looking to buy a foreclosed property in RI. The asking price is WAY too high due to

Asked by Jenna, Rhode Island Sun Apr 27, 2008

the amount that was still owed on the house. The house was abused and needs ALOT of work to move in. The asking price is 273,000 and or first offer is 200,000. Any thoughts????

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I just want to mention that we have run into the same situation with more than one property we were interested in. Amazingly, they were all listed by the same realty company. I heard from other agents that eventually the price will drop and that company will find a buyer.
1 vote Thank Flag Link Fri Jul 11, 2008
Hi Jenna, If you are working with a Realtor he/she would be able to do a CMA to find out what the house would be worth if it was completely renovated. Based on this opinion and what you feel it will take to get it to that point (and of course, what you can afford), make your offer. It has not been my experience, lately for banks to try to get what is owed on a home (foreclosures, specifically) In fact I have seen some drastic reductions in REO homes lately. Because I also sell REO homes, I can tell you for a fact that this it not usually the case. Good luck in your search!
Web Reference: http://www.reori.com
1 vote Thank Flag Link Sun Apr 27, 2008
When you submit your offer, attach to it all you are basing your offer on such as recent comparable sales, repair estimates and photos of damages. Most likely the bank is out of state and does not know the market here or the true condition of the home. Of course they are going to try to get as close to what is owed as possible but they will have to eventually sell it at market value.
Web Reference: http://www.alaynaberek.com
1 vote Thank Flag Link Sun Apr 27, 2008
If a property (preforeclosure/short sale or foreclosure/REO) is priced too high, you have two options: (1) make an offer at or below its true value, or (2) keep looking elsewhere. As your experience demonstrates (to you and to others who may think that foreclosures are the only potential bargains on the market), the real question isn't the legal or financial status of the house, but whether the house represents a good value in today's market. As Charles says, if you've done your homework and the house is worth $200,000, then make an offer for that amount, or less (to allow for negotiation room).

Hope that helps.
1 vote Thank Flag Link Sun Apr 27, 2008
Don Tepper, Real Estate Pro in Fairfax, VA
This is a very common problem, but it is not yours. If you have done your due dilligence and $200K is what you feel comfortable offering for the home, then do it. The bank will most likely counter your offer, but have your Realtor explain exactly how you came up with the amount that you feel the home is worth. What a person owes has absolutely nothing to do with what the home is actually worth. If your area is like many in the country there will be other homes available for you to choose.
I wish you the best!

Charles Coachman
Keller Williams Realty
San Jose, CA
1 vote Thank Flag Link Sun Apr 27, 2008
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