REO Question - Urgent - (respectfully said) - Posted by Jason-PA

Posted by jasonrei on April 27, 2004 at 23:30:32:

I agree with Troy. Make the offer.

REO Question - Urgent - (respectfully said) - Posted by Jason-PA

Posted by Jason-PA on April 26, 2004 at 12:14:23:

Ok here is my dilemma, im a budding investor and this property would be a personal residence. Foreclosure property - went to sheriff sale (bought at sale for 175k - to whom i dont know bank would be a safe bet?) -listed with agent for 154k. First of all i dont understand the price difference (maybe a lower price to get rid of the non-performing assest?) Ok thats a sumarry of the prop.
Fiancee and i bid on property and lost bid by 1,000…what a bummer! Well deal fell through - winning bidders went to house or the banks people went to the house and turned the water on and there was a leak. They bailed on the house and im wondering if its because they put 5 grand down (refund im unsure of) and wouldnt have any money to fix it…or they just bailed because when they went to look at the place it had a foot of water in the basement. In any event im unsure of the timeframe of the water being turned on but it had to be in the basement for awhile. The leak was at the kitchen below the sink in and around the floor,only leaking down into the basement…the kitchen still looks brand new as do the surrounding joists and subfloor. Ok no biggie…if i would have to replace all the pipes in the house i think i would do it…(pipes are plastic built in 96…and in case you are wondering the house was winterized - at least it said it was!!) so down in the basement (unfinished block walls and slab floor - one or 2 studded walls) there seems to be new paint…covering up where the water was…ok-fine…looks like whomever painted - did the whole basement in 5 minutes…trying to hide the evidence of the water stain. And when we were in the house months ago we remembered a wall that was gone…it was paneling and i think they removed it with a sledge hammer—upon closer inspection there was evidence of mold, they also removed the drop ceiling panels…believe me the house is still worth it to me…

  1. Fix broken pipe - there is an arrow on the wall pointing to it…cant see a hole or broken 90 or anything but its there.
  2. What about the mold…i know it can be cleaned with bleach and the remaining drywall that is contaminated will have to be replaced and if there is any insulation that looks cruddy i will have to replace that too.
  3. Furnace looks a little rusty - i pulled the access panel and it looks ok…just some surface rust - i will have an expert tell me for sure.

So my question is how much more of a discount can we get on the 154k price with what has happened - (i wonder how ethical it is to just try and cover it up)…there is mold remaining (ill take photos if needed) not much…but i was hoping that it would be enough for us to get this house at a steal…im in PA if that means anything.

I apologize for the length but ive been on this site for awhile furthering my knowledge and i would have enjoyed reading a post like this…(although i wouldnt have had the answers)

Thank you for your responses!

Re: REO Question - Urgent - (respectfully said) - Posted by Chuck Rosenberg

Posted by Chuck Rosenberg on September 06, 2005 at 13:51:13:

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How long is a piece of rope? - Posted by Troy M

Posted by Troy M on April 27, 2004 at 05:55:29:

Only one way to find out how much they’ll discount…and I don’t mean ask.

Make an offer.

In my experience, one of the best times to make an offer on an reo is right after another contract fell through. Last year I offered $42k cash on an REO. The bank accepted another offer that was slightly higher. Couple months later, the deal fell through and my agent asked if I was still interested in the property, so I offered $32k cash and … you guessed it, they accepted my offer.

Just be sure of the expenses and headaches you are about to incur if/when you purchase this house. Mold can be expensive and I suspect that may be why the other deal fell through. Even though you are ourchasing for your own residence, you have to be careful. You don’t know what the future holds and you may have a need to sell the house sometime down the road. If it were me, I would be sure to purchase at a price that would allow me to correct the mold, plumbing and whatever else needs correcting and still have the option of reselling immediately for a nice profit.

Good Luck,

Troy M