When a foreclosure property is listed, what are the signigicance of the asking price listed.?

Asked by Nic Morris, Australia Tue Jul 22, 2008

I assume this is not the actual expected selling price. But some do refer to a loan outstanding price. What price would I expect to pay in % terms off normal selling price.
Many thanks
Interested investor from Australia

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Jed Lane, Agent, Petaluma, CA
Sun Jul 27, 2008
Nic,
As they say it depends. The significance is the same whether the owner is offering the property or a bank is offeriing the property. It could be what they expect, what they want or it could be set to attract attention and sell quickly. The only really significant peice of iniformation is what will a ready and willing buyer pay for the property. To get at that question one needs to have market knowledge and local market knowledge at that.
When an investor is buying in a new market to them, they have to do the due diligance on the specific market. Look at industry, employement, governance etc. before they can know what the price of an investment should be and what it will return.
Web Reference:  http://www.fogcityguide.com
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Pacita Dimac…, Agent, Oakland, CA
Sat Jul 26, 2008
The foreclosure list price is a guide --- but the actual price it will sell for can be over or under the list price. It all depends on the location, price range, how much it's listed for (is it close to what the lender paid for?). What are the comps.

In the under $300K range, several times, my clients and I have found ourselves in competing situations where the actual and final sale price is above the list price. Just today, the bank countered three offers and asked for our best and highest offer. This is an anomaly. Usually, the bank simply picks the best/highest offer and doesn't counter the others. So we are actually surprised to get the counter.

There is no standard of how much less (or more) your offer should be. Have your realtor do the research --- what the bank paid for the property, what the comps are, are there other REOs and short sales in the vicinity and how do they compare to the property, etc.

Then determine what you consider a fair price, and turn in your best and highest offer. You may not get a second chance, so make it a strong offer.

Good luck!
0 votes
Lisa Cartola…, Agent, Oakland, CA
Wed Jul 23, 2008
Hi Nic,

When the bank lists the property there is usually an appraisal of the property to help determine the listing price. The appraisal will typically take into account the surrounding neighborhood, the condition of the property and the number of homes for sale and recently sold in the area. The % of the normal selling price will vary widely depending on the location of the property. I live in Oakland, CA and the city has a very wide range of property types and neighborhoods. In some areas there will be several bank owned properties on one street with the homes selling for much, much less than they did a few years ago. And then there are some areas in more "desirable" locations where a bank foreclosure is not a common occurrence it is a great opportunity to get into a particular neighborhood.

Foreclosures have had an effect on even the normal market with some areas having house prices changing dramatically. Based on the type of investment you are looking for, doing research on the neighborhood will be important. I would suggest if you are looking for an investment, that you will probably want to look at it as a long term investment.

The California Bay Area has a very wide range of markets, with some still holding up quite well and others not. There are a lot of great opportunities here, but as with many investment properties, many of the foreclosures in the area do have various levels of deferred maintenance and may require work to be done.

Good Luck and if you have any questions about properties in the Bay Area, be sure to contact me.

Lisa Cartolano
Alain Pinel Realtors
Web Reference:  http://www.LisaCartolano.com
0 votes
Michael Barr…, Agent, Irvine, CA
Wed Jul 23, 2008
Hi there Nic. It really depends on the Property, location, stuation. if on the active market of if just a NOD has been filed. Many banks will price the property about 20% below the market value to attract multiple offers. This usually works well for them. We had one with 22 offers in 4 days.
There are just too many variable involved to really determine the actual selling price. So many people put in several offers on the same property to guage the temperature.

If you would like a list of foreclosed or preforclosed properties in Southern California you can search them from my site.

If you have any questions please let me know
Kind Regards and Go Wallabies
Michael Barron
Realtor/MBA
First Team Rel Estate
(714) 552-6817
michael-barron@sbcglobal.net
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