a forclosed home just went on the market and is priced way lower than what many houses are selling for in the area. i am looking to put a bid in tomorrow and the my realtor suggested i bid a little over the asking price since it will sell pretty fast. so i am wondering if people usually do this on property that is listed below market value to secure the sale?
If you are in CA this may be true, but most banks would be estatic to get asking price on a foreclosed house. Agents are paid off commission - the more you pay the more they get paid from the seller, but you are the ultimate payer. I'd give them 10% under asking to start and go up to asking if I really wanted it. Just my 2 cents.
Check the leans on the house before you put a bid on it. It could be way under priced but you could be responsable for $$ not paid by the previous owners for various stuff (taxes, repairs, association fees).
As long as there aren't any liens (sp?) on the property, then its actually a good way to purchase a home for less than market value.
I do this for a part-time living here in San Antonio (Bexar County foreclosure auctions every month). Is this a county sale because those are every first Teusday of the month? The next auction is Feb 1st for all Texas counties. What kinda sale is this? Yes, NJROcket is right as long as there is not lien on the property. ALSO, you will be responsible for any back taxes owed so do your homework here: http://www.hcad.org If you have the account number look up the info. ALSO, is this a SALE or RE-SALE? Sale properties even though you may have "scored" at a low price have a 2 YEAR redemption period, meaning the owner who lost the property has 2 years to purchase it back from you at the price you paid the county PLUS 25%. This is a Texas law. Re- sale properites are a done deal. They are properities noone bought the first time going up for bid a second time . Once you bought it, its yours. ALSO, in Bexar county (I live in S.A. ) the monthly list is about 60 to 70 properties. Come auction day, only about a 3rd of those actually make it. You'd be suprised how long people let their taxes go , then pay at the last minute. Terrible way to take care of your taxes. HARRIS COUNTY, is a MADHOUSE!!! Go EARLY, ask around and find out which sherrifs are gonna sell the property you want. There are sometimes 5 or 6 sherriffs spitting out auctions and it is VERY confusing. (Bexar county is sooooo slow, one sherrif, one property at a time. They even wait for you to get your receipt/ticket after you won a place to start again ) Last but not least, if you think you're scoring a deal, there are about 50 -60 other people (or MORE in Harris county, its a nightmare) that have also looked at the property and are ready to "score" as well. BE READY TO BID HIGHGER THAN YOU THINK...but you'll still get a good deal if everything goes well. Good luck man and let us know how it goes.
thanks for all the advice. the house is listed on www.har.com so i am pretty sure its not a county sale or auction. the listing is offered by fannie mae and it is setup by a realtor. my realtor i am working with said he would go in $2k over listing price due to the area being a VERY attractive area. He thinks there will be many offers on this house since the list price is so low. The listing is $17k less than what it is appraised on hcad.org. i will definately check to see if there are any liens on the house. this will be my first home if everything goes through so i really appreciate all the input.
Why would they list at $17k less than the HCAD value? That's sizable, unless there's something wrong with the house.
esse has essentially covered everything I would say. The biggest thing to keep in mind. Forclosed homes tend to me in rougher shape than a normal re-sale. I mean, when someone doesn't pay for something, they don't tend to care for it either. And since there isn't a seller's disclosure, you have to be careful about the home's condition before you buy it. You might save $17K on the price, but the home may need $25K in work to be liveable.
Hey esse ! (Just had to say that). How much capital would you think a person needs to get involved in this? What about taxes on reselling the property, are they high? Thanks, DD
you figured since its a foreclosed home it would be gutted but the capret is new and there is new stainless appliances. of course there is some stuff that needs to be fixed up but thats teh case with any older place. since there is not a sellers disclosure i am guessing this is where a good inspector would come into play.
But let's say you get a good inspector and he finds out a bunch of stuff wrong... I'd guess you won't be getting much in concessions out of the seller? Aren't forclosure sales kinda as-is?
definitely get an inspector the cosmetic stuff may look nice, but structure is whats most important termites, mold, foundation, etc.
It all depends whats out there. Remember these county auctions are CASH only. If there are back taxes those must be paid by the end of the day as well. Lets see, in December we got 3 properties. 1 REALLY nice ranch home appraised at 170k, we got it for 70K! (Of course there is still the 2 year redemption thing) We also got 2 homes in the "hood", one for 3800 and another for 8K. Both of them sort of run down, liveable yes, but needs work of course. Last month we only got 1 property sort of waaay south of S.A.. Nice little home out in Von Army for 12K. Sometimes properties being in the hood, you could rent it as is to whoever is living there until the owner buys it back from you. You can really score on empty lots if its on a decent street, plus theres no repairs to make except for cutting the grass or clearing some trash, then putting up your For Sale sign. Depending where they are, a minimum bid can start as low as 500bucks but generally "ok" lots on "ok" streets start at around 1500. I was in the Dallas ghetto last week and all of those lots had like minimum $100 bids...keeping in mind it was Crackville! The Re- Sale auctions are mostly empty lots noone wanted, but still get 3 or 4 of them and flip them, you might make a little cash. The person I work for is worth millions so he deals in quantity, this is how one could REALLY make money by gobbling up low income properties and re-selling to people in those situations without good credit at outlandish percentage rates. Sounds sleezy I know, but hey everyone needs a home to live in and anyhow, what can they do otherwise with bad credit or no down payment? Scoring few properties here and there is fine, but be realistic, you probably wont hit the jackpot with a few properties. It takes some time so ya gotta be willing to deal with all the responsibilities of being a landlord/slumlord oh, not sure about the costs of re-selling. I assume the usually closing costs etc...If all taxes are paid by you before hand, there are none to pay when you resell.
all the homes i have put bids on i usually went 5-6% lower than listing price. now i am doing the opposite and offering 2k over the listed price. i guess i am wondering if i am doing the right thing here. if you guys were in my shoes how would you approach this?
well good news...they accepted my offer and i have the option on the house! glad i jumped on it cause between friday and saturday there were at least 14 showings. now comes all the paper work. if you guys can recommend an inspector that does both structual and your regular inspections i would greatly appecaite it.
is this the person you or your wife use all the time? i think you had mentioned it in a previous thread or something.
Isn't it true that most people that foreclose on their home don't necessarily leave them in the best of conditions? I've heard stories about people popping holes in walls and pouring cement down the drains.
