Buying our First Home. Tring to get a good deal.

Question

Hello. My Wife and I have three children. We need to move up in our living situation. Our area has TONS of Forclosurs and Bank Repo's around. I see Orange Sherrifs sales tags in 1/4 of the homes ! The Market is WAYYY down and We have decided now would be a good time to find somthing a little cheaper than we could a year ago when we last looked. We have 15.000. Thats about as high as we wanna go right now. There are houses for 8 thousand - 200 thousand. We are tring to figure out how much is too low of an offer. Since im working with 15 should I look at houses for 15 or should i be looking at more 20 thousand range houses? Would it be possable to offer 15 on a 20g house? I was told a 8 thousand offer was turned down on a 15 thousand dollar home THAT IS YUCK lol (we looked) Id give em 1000 lol I live in 43920 Zip Code Ohio. If anyone has any advise i would love to hear from ya ! Thanks

Answer 1

I think you would be safe to look at houses in the 20k range.  Offering 15k for a 20k house isn't unreasonable, especially in today's market.  If there are as many houses for sale as you say then the sellers should be willing to negotiate.  Since you will probably end up buying a foreclosure you should know that banks can be harder to deal with than regular people.  They usually want proof of funds when you make your offer.  So, when you are ready to make an offer go to your bank and have them write you a letter saying that you have the funds available.  If you are paying cash that can help in your favor.  Most sellers would rather work with a buyer who is paying cash rather than one getting a mortgage.

Answer 2

It looks like it is definitely a fixer-upper, take off for new carpet, new kitchen counters, updated bath, I would offer 19,000 and have them counter offer. Lots of work to be done. Good luck

Answer 3

In most cases, the asking price for foreclosed properties reflects what should be reasonably expected in an offer. Contrary to what you read all over the place, lenders are NOT giving these properties away.  Lenders are fully aware that market values have dropped, and are pricing their REO properties according to market value, and NOT to what the lender has outstanding on the property.

A quick look at the property you have shown indicates to me this is a FANTASTIC deal at around $20K-$25K.  It appears to have vinyl siding, a decent deck, a somewhat dated, but very acceptable kitchen, and a nice open staircase.  Where I live (in Wisconsin) such a property would easily draw $75,000.  Unless this property has substantial unshown and hidden defects of a costly nature to repair, it looks like a very decent deal.

Ask your real estate buyer agent to provide you with recent and comparable written evidence of sales which would indicate what similar properties are being sold for.

You can negotiate somewhat, but do not expect a lender to take a ridiculously low offer.  They will reject your offer and wait for another which more closely matches what the market prices dictate.