How do they come up with a price for foreclosed houses?

Question

How do they come up with a price for foreclosed houses?

Answer 1

here in arkansas the price put on forclosed homes is what is owed on them.an example is, a couple we know bought a house for 95 grand.its value was 350 grand but the 95 is all that was owed on house.

Answer 2

In most cases foreclosed homes prices are dictated by several things:

1.  The current market within that area:

Banks aren't in the real estate market, they are in the lending market.  So current market conditions will help determine a "fair" market value for the home.

2.  Cost of the property:

In most cases they want what is owed on the property, plus costs for fixing anything that is currently wrong with the property.  Most lenders will only lend money on "as is" properties.  So they understand if there are major issues with it, that these things have to be repaired prior to marketing the property.

3.  Sales costs:

If a Real Estate agent is sought after for the sale of the property.  They will work those costs into the pricing.

Keep in mind that if a foreclosed home is up for sale, you must inspect this property extremely well.  Most people aren't really that happy about losing there home.  So they might damage or take certain items out of the property that are of value.  Marble counter tops, wood work, trim, appliances, etc...

Good luck