Re: VA Foreclosures - Posted by Dave T
Posted by Dave T on May 23, 2000 at 14:04:45:
- Are the comps figures available on the internet, (I used OCTitle.com)a true reflection of the FMV of these homes?
A. Not necessarily. If you are planning to submit a bid on a VA foreclosure property, you must go through a realtor. Just ask the realtor for comps on the property before determining your bid price.
- In Florida, the foreclosed properties are controlled by RE brokers. Are the prices inflated because of this?
A. No, not usually. Depending upon the VA district office, the initial list price might reflect the current full market value of the property, adjusted for condition of the property. The broker has no incentive to inflate the price because the sales will just slow down. To make money, the broker must depend upon a good volume of sales as well. That just won’t happen if prices are not competitive with comparable properties.
On the other hand, the list price may reflect the absolute minimum price the VA is willing to accept. Check your local VA practice with a realtor that is familiar with the VA sales process. In my market area, VA/MD/DC, the VA list price is at or near full market value. I believe in the southwest part of the country (Southern CA and AZ) the VA list price is the minimum acceptable price. In this instance, a successful bidder most surely submitted a bid higher that the list price.
- What is the differece between the bid price and the net price listed on the VA Web page? What is the property truly purchased for?
A. For properties under contract, the bid price is what the buyer will pay for the property. The Net to VA is what the VA will clear after selling expenses and discounting the loan.
It is not unusual in my market area for owner-occupant buyers to pay higher than list price for a property. If the property is especially desirable and the list price is considered below market, the property may go higher than the list price. I have observed that an owner-occupant buyer almost always pays more for a property than an investor is willing to pay.