Mckenzie, Home Buyer in Bakersfield, CA

Are foreclosures typically a?

Asked by Mckenzie, Bakersfield, CA Tue Nov 27, 2007

I'm looking to purchase a home in the Bakersfield area and have found several forclosures in the market. I've found conflicting advice about the real value of a foreclosed home...any opinions or advice?

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Jim Walker, Agent, Carmichael, CA
Fri Jan 4, 2008
In my own experience, foreclosures are often overpriced when there are very few of them for sale in the market. Such as during the 2003 - 2004 real estate bubble. Simple economics of low supply and high demand for "foreclosed houses" drove the prices of foreclosure homes to a premium over the relative values of competing homes.

in 2008, there is such a large inventory ( supply ) of foreclosed homes that they do not carry a premium price any more. Indeed, the market is has reversed so completely that some foreclosed homes are listed below the prices of competing homes. Most are still overpriced, but there are more bargains coming to market or experiencing price reductions every day.

Disclaimer: I am in the northern part of the Central Valley, near Sacramento. Bakersfield is several hundred miles to the south.
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J. R. Lewis, , Bakersfield, CA
Fri Jan 4, 2008
Right now our market is flooded with foreclosures, short sales and REO properties. Simply put, one cannot assume that just because the sellers were in distress does not mean the home is a good deal. I suggest consulting a realtor who can break down the deal for you by comparing real prices with the relative value of the neighborhood. At my brokerage, we offer this service free to buyers and I would be happy to provide you a list of genuinely good deals that are available right now.
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J, Home Buyer, Bakersfield, CA
Thu Dec 13, 2007

Having a real estate agent in this market is essential. They should be able to find the real "value" in any home, even foreclosures. They also helped me to anticipate costs and give me complete picture of what I was getting into. I had the guys at action real estate help me and they were great. Look them up.
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Angela Benne…, , Glendale, CA
Tue Nov 27, 2007
Agreed - a deal is a deal, and foreclosures are not always a "deal" -- banks need to make their money on homes that were mortgaged to the brim.

A seller who's property doubled in value in the last few years will be much more willing to negotiate away their equity to get a sale in this market.

Keep your options open, and follow the advice below regarding pricing, liens, & repairs.
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Lorie Gould, Agent, Duluth, GA
Tue Nov 27, 2007
Real value for any property is market value less any repairs or improvements needed to bring it up to market standards.

Do your research on comps plus your due diligence with inspections and the cost for repairs/ improvements. Do your research on liens... and plan ahead for any liens that have yet to be recorded and ask about an owners title policy. There is a lot to watch out for with foreclosures.

Foreclosures do not mean the best deal on the market!

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ian cockburn, Agent, New Orleans, LA
Tue Nov 27, 2007
I agree with the last need to be "armed" with the latest and greatest solds in the area of the very careful, and understand what it takes to put the houses back together, and understand your buy and hold, fix and flip, and the timeframe in which to take the action.
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Angelique Ly…, Agent,
Tue Nov 27, 2007
I would suggest that you consult a realtor and get some comparable sales in the area so you have a better idea of what the home is actually worth. Just because it's a foreclosure doesn't mean its a great buy! Do your homework just as you would with any other home purchase.
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