Looking to buy a FORECLOSED home?
I just looked at a home today that is foreclosed. They are asking $146,000.00 for a 3 bedroom, 2 bath and 3 car garage. It has a loft upstairs that is clearly an add on with a incomplete bathroom. There are MULTIPLE things wrong with this house. There are holes in the wall, kitchen cabinets look terrible, no appliances, NEEDS CARPET BAD (or anykind of flooring, tile, etc) Needs to be cleaned and needs windows. To many more things to list. This home has GREAT potential. I am guessing about $65,000.00 to renovate EVERYTHING! First off, how do I go about purchasing this home. I don’t want to “lowball” them, but clearly this home isn’t worth $146,000.00. Who do I need to go to and what do I do? I have a gut feeling about this house and I love it, but how do I go into this without sinking in it? It has been sitting empty for about a year and a half…it needs work badly, but i love it. JP Morgan Chase currently own the house…
What do I do? And how do I go about it? Thank you!
Tagged with: Great Potential • Jp Morgan • Loft Upstairs
Filed under: Renting & Real Estate
Like this post? Subscribe to my RSS feed and get loads more!
Possibly related posts
- i am buying my first home. asking price and my price?
- anyone want to buy a home outside of houston?
- Is this common practice for a bank when buying a home?
- Do you Buy Energy Star approved appliances?
- What should I do If a someone at work is following me home and is trying to see where I live (which she did)?
Why not lowball them? Hell, its just a bank and besides, they wouldn’t cut you any slack. They obviously didn’t cut the previous owner any. Good luck.
You really need someone to represent you in this transaction. I do caution you in buying this, and will tell you a story, which I will attached for you to read. Find a Realtor to work with, someone who has experience in dealing with REO or foreclosed properties. You want to know what has been selling in the neighborhood, if you find most are selling over $200,000 then you might be ok with this one. But have the agent do a cma on this property. Wish you all the best!
Read on:
Foreclosures become more than some bargain for
Jim Buchta, Star Tribune
No one needs to remind Danelle Hoeppner that the number of mortgage defaults is skyrocketing. Almost two months ago, she and her fiancé, Brad Cheney, made an offer on a Bloomington house that was in default, but they have yet to get a response from a California lender that holds the mortgage.
“With all the houses on the market, don’t you think they’d want your money?” Hoeppner said. “I guess that’s not how it works.”
If you believe the infomercials promising instant wealth from distress sales, then the record number of foreclosures should mean easy pickings for investors. But real estate agents and prospective buyers say that offers on many bank-owned houses go unanswered for weeks and! that closings are sometimes abruptly canceled.
Sales agents blame the delays on a growing backlog of listings and on ill-prepared mortgage companies that might be hundreds of miles away and grossly understaffed. Some experts say that buyers themselves are contributing to the problem by making unrealistic offers in hopes of snagging a bargain.
“It’s unbelievable, and I’m hearing this from every agent I talk to,” said Jay Anderson, of Coldwell Banker Burnet in Minneapolis, who has been waiting six weeks for a response to an offer of his own on a foreclosure home that he plans to hold for investment.
Listings backlog is growing
Experts say that buying a bank-owned property shouldn’t take longer than a traditional transaction and that most come off without a hitch, but real estate agents say some buyers are facing increasingly frustrating delays as mortgage delinquencies rise.
Earlier this month, a Minnesota study based on sh! eriff’s sales said there were 11,207 foreclosures statewide in! 2006, a nd a record pace has continued through 2007. In July alone there were 975 foreclosures in the 13-county Twin Cities metro area, up from 392 a year earlier, according to RealtyTrac.
The sluggish housing market is doing little to help those who are unsuccessfully trying to sell their houses before the situation comes to a final sheriff’s sale. These houses often become “short-sale” listings, in which the owner has made arrangements with the lender to sell the property for less than is owed so that it won’t go back to the lender.
Those transactions can be more complicated, in part, because the sale terms must be approved by the lenders. Additionally, those lenders often are in offices far away where loss-mitigation departments are struggling to process the listings and to prevent other homeowners from meeting the same fate.
Richard Bauer, the agent representing the anxious sellers of the house that Hoeppner and Cheney are trying to buy, said that, acr! oss the country, lenders are struggling to adapt to changing market conditions.
Bauer said that he has received four offers on the Bloomington house, but that none of the other buyers was willing to wait for the lender to process the offer, leaving the sellers closer to foreclosure.
“You hear that and it doesn’t sound logical,” said Bauer, an agent with Edna Real Estate in Minneapolis. “But you ask: ‘Is this whole mess logical?’”
An expert’s view
Danielle Babb, a California-based real estate investor and author, said inquiries about bank-owned listings have increased 400 percent nationwide, but because a typical lender can process only 10 to 12 a day, the levels are becoming unmanageable.
Babb said most major lenders and brokers are well-equipped to handle the barrage and have large staffs that can be reallocated from one task to the next. But many small- and medium-size companies that are new to the mortgage industry just! aren’t nimble enough to process these transactions quickly en! ough, sh e said.
“And with layoffs [happening within the industry], banks are even more understaffed, so they’re not ramping up yet,” said Babb, who recently coauthored “Finding Foreclosures.”
Dan Arrigoni, president and CEO of Twin Cities-based U.S. Bank Home Mortgage, said his company doesn’t have a backlog of listings, in part because it didn’t offer the riskier sub-prime and Alt-A mortgages that are much more likely to default.
The company, which works with a national real estate service and local sales agents, now has just under 120 properties, and the average market time for them is about four months.
“The Realtors want to sell them as bad as we do,” Arrigoni said.
But he acknowledges that many mortgage companies are preoccupied with staying in business. “These companies are struggling to survive and to fund loans,” he said.
Patrick Carey, senior vice president of default and retention operations for Wells Fargo Home Mortga! ge, said that while the number of listings his company owns has increased, the firm has ramped up staffing and training to meet demand.
Carey said his department is trying to process its houses quickly in large part to avoid negatively affecting the community.
Foreclosed houses can be a drag on property values if they fall into disrepair or if they are sold at fire-sale prices.
“We don’t want to deteriorate values in a given neighborhood,” he said. “Investors need to get market price for that property.”
From both sides
Byron Anfinson of Coldwell Banker Burnet said he has seen the situation from both sides. He has had buyers who were essentially left homeless because of problems with title work that delayed a closing, but he also has received a response from some lenders in as few as 15 minutes.
Lenders blame consumers for some of the delays, either because of ridiculously low offers or because of incomplete pape! rwork submitted by the buyers.
Jim Miley, president o! f reside ntial real estate for Bremer Bank in Minneapolis, said many lenders are losing big bucks on their listings because they financed them at the peak of the market or extended credit beyond the value of the property.
“We’ve had some very zealous lending going on,” he said.
Some even speculate that lenders aren’t eager to sell their listings because they’re waiting for the market to improve or the market has changed since they priced the listing.
Patrick and Briana Schiebout wondered if such a situation happened when they bought their split-entry house in Rosemount. The first-time buyers saw it, loved it and made a full-price offer in an effort to clinch the deal.
It took the bank seven weeks to respond, and then it countered with an offer slightly higher than the original list price.
The couple, who saw a foreclosure as a great opportunity to finally get into the market, were willing to pay the higher price because they just didn’! t have the energy to go through the process all over again.
“We threw our hands up in the air,” Patrick said. “We didn’t want to wait another seven or eight weeks, so we accepted.”
Does the house worth over $230.000 if it was in good condition? If less than that, you are taking a big risk.
Get a good agent to give you honest and informed opinions,and help you through the bidding process. I just bought a foreclosure a week ago after losing 7 bids earlier this year. You have to know the market value of the house if it was in good condition. Then you deduct the est. cost of repairs, plus taxes, utilities, and commission to get a possible entry price. Make an offer below that entry price…