QUESTION:
Frank,
I currently live in the NoVA market (well, it's considered that anyhow). We're looking in Stafford County, where we have a 1+ year supply of homes, REOs growing by the day, and it's all leaving me a bit lost as far as "home values" are concerned. I mean, why would I buy a "fixer upper" at $339, when I can go 2 miles down the street and buy a brand new home (similar size, with granite, upgraded cabinets and a finished basement) for the same price (same square footage of main house)?
Frank,
I currently live in the NoVA market (well, it's considered that anyhow). We're looking in Stafford County, where we have a 1+ year supply of homes, REOs growing by the day, and it's all leaving me a bit lost as far as "home values" are concerned. I mean, why would I buy a "fixer upper" at $339, when I can go 2 miles down the street and buy a brand new home (similar size, with granite, upgraded cabinets and a finished basement) for the same price (same square footage of main house)?
My budget is pretty small (want to keep the total loan at $250k), but I need all the square footage I can get (in the right places)
We are primarily looking at REOs, with the thought that in this market, the banks will be a lot less "offended" by a low-ball offer, and more likely to take it. We are headed to an auction in one week (the opening bid is $50k), the house is a REO that has been on the market for over a year (last listing was $339). It needs a *LOT* of work (roof showing wear, all new floors, paint, appliances and bathrooms (UGH!). We don't plan to bid more than $200k for the property, but I don't want to make a huge mistake either.
OR, should I be looking at REOs around $400k that don't need any work and just make low-ball offers to the banks?
If you were my realtor -- what would you suggest I do?
(we have secured financing for a loan that is *much lower* than what we could qualify for. Our total income is $120k, and our outstanding debt is minimal.).
I'd appreciate your advice. I'm not in a rush to purchase and can wait -- but after living in a basement with 2 kids for 4 years, I'd really like to have my own home again!
thanks.
Linda
MY REPLY:
Hey Lisa,
I know that buying a bank property sounds sexy and all, as if you can get half price or something, but that isn't happening. You would think that banks are jumping all over any offers. Actually the opposite is true. They take sometimes as long as 3 months to reply to offers and they just aren't motivated. It is very strange.
I assume you read my blog about REO & SOL homes? "SOL" Homes defined
As for that auction, let me know how it goes. Most auctions around here are fake marketing tricks. A good auctioneer will get 90% of list. People think they will get a steal and that bids everything up.
If I was your Realtor, I would say to increase your budget by 10%. I know it sounds salesy, but 90% of my buyers have a "what I think is reasonable" price in mind, yet they all have taste buds right outside that "budget." This tries to explain why: Buy Bigger! You’re Only Borrowing It...
As for gut jobs vs fixer uppers vs move in ready, it is a personal preference. I HATE all forms of rehab. The workers never show up, everything costs more, takes longer etc etc. But if you like it, sure you can be better off getting a place in worse condition for a lower price. I tend to steer away from SUPER dumps as they can have hidden problems like mold or needing to be condemned. I'd prefer a place that with $20k you can do wonders to it, with 75% of the budget for the kitchen and bathrooms, and maybe new windows. Consider hiring a stager (normally used for selling) to help renovate your place for less.
Frank Borges LL0SA Broker FranklyRealty.com
(please report typos)
keywords: Stafford homes foreclosures, loudoun, forclosures, foreclosed, foreclosure, Bank Owned, liquidation county fairfax, staging, renovations .
(please report typos)
keywords: Stafford homes foreclosures, loudoun, forclosures, foreclosed, foreclosure, Bank Owned, liquidation county fairfax, staging, renovations .