How to buy a Forclosure - Posted by Arlene

Posted by Bill-AL on September 05, 2003 at 24:22:55:

It can be shocking what price some banks accept on foreclosed properties! Check to see what the property sold for at auction. This might give you an idea of what to offer. (Also, sometimes banks sell REO property for less than they were offered on a short sale proposal prior to the auction.) Submit a low initial offer, you can always go higher in negotiations if you have to. Good luck!

How to buy a Forclosure - Posted by Arlene

Posted by Arlene on September 04, 2003 at 17:53:47:

Hi, I am in contact with a Real Estate agent who only deals in Forclosures. My questions are:

  1. how is the price determined? The asking price is already 30%-50% less than comparables. Can I ask for less?

  2. Is it possible to get financing for such litte money, ie. $20,000-35,000.

  3. They need a little rehabbing because they are so old, between 1925-1960. What kind of rehabbing can I expect for just an old house? Is it possbile to get the house better insulated?


Re: How to buy a Forclosure - Posted by Jasonrei

Posted by Jasonrei on September 06, 2003 at 11:28:57:

These are general answers.

  1. Broker gives lender their opinion of value. Lender has someone else give their opinion. They work between the two numbers. You can ask for less. Some won’t budge, some take considerable discounts depending on which way the wind is blowing.
  2. Yes, it is possible to get financing for such little money. I have had private lenders loan from $0 to $200,000 unsecured, from $20,000 to $100,000 secured. My hard money loans have ranged from $25k-$100k, with the typical loan being in that $30-40k range.
  3. Most of my houses are built 1940-1965. Typical repairs are all new flooring and paint, 1/4 need a new roof, kitchen updates (new countertops, new or painted cabinets, all new appliances), minor plumbing, new central ac and heat, light sheetrock work, all new door hardware, 2-5 new fans, a couple of new windows, minor leveling, etc. $8k-$16k is typical. Never under $8k. I don’t usually add insulation. When I do it’s when I tear out sheetrock on an exterior wall and there isn’t any insulation there, then I feel obligated to put insulation in those sections only.