Bud, Home Buyer in Granada Hills, CA

Im approved 225k 4 a home loan. There are a lot of short sales and foreclosures available in my area. Should I make offers on houses 250k-260k?

Asked by Bud, Granada Hills, CA Sat Jan 28, 2012

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Dan Tabit’s answer
This is where a good agent is valuable. Some homes are overpriced, some under and a few are just right. Short sales should go for less than other homes that are essentially similar but not short sales, otherwise why wait 90 to 180 days or even more without knowing if you will ever get to buy the home?
Find your own agent to represent you and do the research to determine fair value and assist on an offer strategy for the home you want to own. Remember, you are investing more than just money. You will be there a few years, make many memories and it should be a place you really enjoy. Best of luck.
1 vote Thank Flag Link Sat Jan 28, 2012
Many factors would have to play into that. There could be a house listed for $250K that is really worth $275K that will end up in multiple offers. There could be a house listed at $250K only worth $200K because the seller is unrealistic at the time.
If you want to look at houses higher than you can get a loan for I would bid on short sales. They take a while with no guarantee but if you can snag one you can usually get a good deal.
I work the area if you are looking for a Realtor.
Good Luck if I don't hear from you.
Web Reference: http://www.laura4homes.com
0 votes Thank Flag Link Sun Jan 29, 2012
Hello Tybud,

While there is no harm in bidding less for a home, most homes are still going at market value and bank foreclosures are still getting multiple offers. I saw an awesome home in El Sobrante the other day..4 bed/3 bath, over 2000 sq ft ..the price has just been reduced to $214K. If you like, I can send you additional details on this home and others similar to it to give you an idea of whats out there.

Feel free to call or email me if you need further assistance.
0 votes Thank Flag Link Sat Jan 28, 2012
Short Sales and Foreclosures although being distressed in nature are still going to want market value. In the case of a Short Sale the seller will go into contract with you pending approval by the seller’s lender. The seller’s lender will then order market evaluations and often a full appraisal to determine the market value of the house. In other words if it’s worth 250, 000 they will want 250, 000. In a foreclosure the market evaluation has already occurred and that is what the bank/seller of the foreclosed house has used to set the price. In both situations there is generally a little flexibility (especially for cash) but probably not that much. that being said they often oar off in the evaluations so have your agent do the research for comparables to determine market price.
0 votes Thank Flag Link Sat Jan 28, 2012
There a variable factors:
1. How many days has the property been on the market? Days On Market, aka DOM, is indicative of properties being overpriced.

2. Your realtor should pull the comparative market analysis, aka CMA, around that property. If there are comps to justify the $250-260k range, then your chances of getting a home for $225k is slim. Those sales comparables could be used by the appraiser to appraise the property values around the area. This will also tell you if you're offer is too high for that area.

3. Location can also trigger multiple offers. If the property is located in a very desirable area (for example, schools, public transportation, and other desirable amenities), you're not going to be as competitive with your offer. If that's the case, then you really should be looking at properties in the $200k range to stay competitive.
0 votes Thank Flag Link Sat Jan 28, 2012
Why are you not only going to the top end of your approved amount, but trying to stretch it more? There is no law that says you have to get a mortgage for 225K. It makes no sense to shoot for the top of your limit and stretch your finances.
0 votes Thank Flag Link Sat Jan 28, 2012
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