Doug Garner

Why do you think it should be $450,000? There are many houses that were valued or appraised 6 months ago and have lost more than 20% of their value in a short time. Maybe the seller is in a "have to sell" situation". I just listed a house at 80% of the "market value" because the seller wanted (and needed) the house to sell and close within 30 days. Luckily, we had multiple offers and the property sold for much higher than asking price. Yes, the seller was prepared to accept an offer at asking price and we needed to create instant activity so the marketing price was a seller strategy to get the highest possible dollar amount in the shortest possible time. Seller's are happy their property is sold in 30 days. Buyer is happy they got a great deal on a house.

I'll assume, for my opinion in this situation, that the house is truly valued at $450,000 today and $379,000 is at 80% of value.

As with Bill and Scott's previous answers, I don't know of anyplace that would say it's illegal. Unlike Bill and Scott's answers I don't think anyone would determine it to be unethical or immoral as long as the seller is prepared to accept a cash offer at the asking price. My advise, as with any buyer in this type of transaction is, determine what it's worth to you and make your best offer first. It you get it, then great, you bought a house at your price. If you don't get it then feel comfortable in the fact that you made your best offer and would not have purchased it at any price higher than what you offered. Minimum bids, disclosed multiple offers and competitive bidding have been around for...... well, forever. - Tue Sep 16 2008, 07:24

Always a terrible situation to be in. Don't feel alone, there are thousands of sellers in Kentucky in the same boat you are in. Many can't reduce because of their mortgage balance. Many have already thrown in the towel and let it go back to the mortgage company. I have had a condo on the market for close to 180 days, priced below any comparable unit, vacant, new neutral carpet, fresh neutral paint in every room, professionally staged, all appliances included. NO OFFERS. I keep telling the seller to reduce, reduce and they have again and again, but still NO OFFERS. Now it's not that I'm not motivated to sell this condo it's that I get a terrible lump in my throat when I have to call the seller. I feel like I am letting them down and hesitate to suggest yet another price reduction but I know that's what it's going to take to get it sold. Maybe your agent has that same lump in his throat and feels like they are letting you down so here's my suggestion (if you haven't done this already). Call your agent and say " Agent.... I know this market stinks but I HAVE TO sell this house in the next XX days. I'd like for you update your market analysis on my home, I want to see what my current competition is and what has sold since we put this house on the market. I'd like for you to come over on Thursday night and tell us what it's really going to take to get this house sold NOW."

Then, don't be surprised at what the results of the market analysis suggest and be prepared to make some tough decisions. Reduce? repairs? repaint? stage? combination of all of the above? It doesn't sound like your upside down but many sellers are negotiating with their lender to reduce the mortgage balance in a short sale.

Good luck to you! - Wed Sep 10 2008, 13:33

And the answer is: It depends. First off, the people who are handling the sale of the property now that the bank owns it probably (sometimes they do) has no idea what the bank had to bid for it at the court house steps. Actually, the bank didn't really pay anything for it at the court house steps, they were just protecting what they had invested. There was just no one else at the court house steps willing to bid any higher than the banks last bid on a house they could not inspect before bidding. After foreclosure, the asset manager is charged with getting the maximum dollar from the resale. Sometimes the resale is for far more than the amount owed when they foreclosed and many times here recently it's for far less than what was owed. The asset managers will usually get a licensed appraiser, as well as a couple of real estate agents to give them a current value. The asset manager then has to decide what price to offer the property for sale, based on their own "unscientific" plan by considering what is a reasonable amount of time on the market and how badly they need to get rid of it. If the property doesn't sell in the time frame they had established they will reduce the price. I've always considered it, and explained it as, a reverse auction. I've seen offers rejected by the bank this week and then they reduce the asking price next week to a price lower then they just rejected. With some asset management companies / banks the person who reviews the offer id not the same person who manages the marketing efforts. The trick is, knowing when to jump. Here are a few questions I always try to ask or determine of buyers for foreclosed properties (or any property really). Maybe answering some of these questions for yourself will help you make a good decision. How bad do you want it? Is this the "house for you" or are you buying strictly as a business decision, investment? How long have you been looking for a house? If you don't get this one are there half a dozen others for sale that you'd be happy with or is this the only one that fits your buying parameters? What's the property worth to you? If it's $70,000, then offer $70,000 and if you get it GREAT! But if you don't get it be satisfied that you made your best offer. But if it's worth $82,000 to you then offer $82,000. Just be happy with the price you decide to offer. Have your agent do all the home work for comparable sales, etc. They can help you answer the questions you need to know to make an informed decision. Do not underestimate the amount of work that needs to be done on the property. Many (not all) foreclosed homes need lots of work on items that you will only find out about after you've closed on it. The banks are only required to disclose defects that they know about. They have never lived there, they rarely know anything about any defects. Sorry for the lengthy response, I could go on and on but I'll cut it off here. Please let us know your decision and the outcome. - Sun Aug 10 2008, 20:14

I see this question is fairly old, but has received no opinions. You may already have the answer your looking for. Great question, I'm just not sure there is a good simple answer. With the property being owned and operated by a privately held corporation I believe the only way to evaluate the investment would be to have an attorney review and evaluate the entire "package". Would you own the unit by general warranty deed? Or, is it something like a life estate? - Sat Jun 21 2008, 07:55

I may be able to help. The overall general statistics for the Northern Kentucky area have not yet been released for May. These stats are the stats that are published by the NKMLS and are released to local media, etc. However, any real estate agent should be able to provide you statistics that would be more relevant to your particular property or neighborhood. Things like historial averages, days on market and current absorbtion rates can be evaluated for Edgewood or, your neighborhood. In general, the current absorbtion rate for Edgewood/Ft Mitchell/Crestview H/ Lakeside P for single family residential is a little over 7 months. Compared to the area-wide absorbtion rate (all property types) of approximately 9 months. I would be happy to be more specific if you want to provide more information on what sort of stats that your interested in. - Sat Jun 21 2008, 07:46