Can I buy a foreclosure for below list price?

Can I buy a foreclosure (bank owned home) for below list price? This is a very common question I am asked almost daily. This is my answer:

It really depends on the individual situation. Here are the first few questions that need to be answered about about the property.

1. Is the home priced below market value for that neighborhood?

2. Is it in distressed condition?

3. Are there other offers on the home?

Question 1. - I always do my homework and check the comparables to find out if the home is priced below the normal sold price for that neighborhood in the past 3-4 months. Would you expect to pay less then what other homes sold for in the last 3 months? Yes I hope so that would be the only reason it would be a great deal. If it is less then what other homes are selling for then why is it less? What are the days on market? If it has been on the market 90+days then why? Which leads me to Question 2. - When my client wants to purchase and is qualified to buy I always view the property with my client. Many times a bank owned will be in distressed condition: Walls will need painting, carpets or flooring will need thorough cleaning and some appliances might need replacing. These are all very common expected fix ups in Foreclosed homes. I try to calculate an approximate fix up cost to bring the property up to move in condition. This gives my client a ball park figure for fixing up the home. It will also let us know if the fix up costs will exceed the market value for other homes in the neighborhood.

Question 3 - is the MOST IMPORTANT. As in any competitive situation, if there are two or more offers on the same property then it will be tough to get the home for below list price. No, we will not know the amount of the other offers and you can write an offer for below list price but it can be like pulling a needle out of a haystack. I recommend a price to my client based on the recent solds in the neighborhood. I deal with competitive situations on a regular basis. Buyers have to be open to perhaps going to list price or might even need go above list price. (crazy as that sounds) It still might be a good deal for that neighborhood. Buying a foreclosed home is a fantastic way to get a great deal on a home if you are seeking to buy in a particular neighborhood. My advice to any buyer is to listen to your realtors' advice when writing an offer price on a foreclosed or bank owned home. If your realtor is good they should provide the comparables to you . I have the knowledge and expertise but please choose a realtor who has experience in the market you are trying to buy in! This will help you have a successful purchase!!

In answer to my original question Can I buy a foreclosure for below list price? Sometimes yes, and sometimes no. It depends on if you have other offers on the same home and what that neighborhood sales market looks like. Good Luck to you and I wish you much success in buying your home!
Post your questions and comments to me. I look forward to hearing from you!

Irene Curry, Realtor, ABR

Prudential Carruthers Realtors

http://www.ireneshomes.net/

irene.curry@cox.net

cell: 703-677-7677