I wouldn’t. I spent 5 weeks going round and round with a bank owned property in San Antonio. The foreclosed former owners had taken the carpet and some other “portable” items (this is typical in foreclosures) but the price was full market. They’d inch down the price but only when I could provide costs from a contractor as to what the repair would cost. It took 3 days for their committee to approve a prive adjustment.
There are a lot of houses out there, no need for this many headaches first time out.
3 Bed, 1.5 Bath
1,130 Sq. Ft.
GREAT THREE BEDROOM, JACK AND JILL BATH, LAMINATE FLOORING IN KITCHEN, LARGE DINING AREA, CORNER LOT ACROSS FROM THE SCHOOL.
Fair condition- some possible foundation issues. Low rental area. In need of paint, carpet, appliances, sheetrock repair…
Asking price is 33,000. A similar house next to it…the asking price is 48,000 and it is in need of carpet and paint. I was thinking I could possibly do a lease option…I appreciate your opinions.
Posted by Natalie-VA on March 22, 2006 at 18:02:36:
T,
I think Joe thought that you wanted to buy it as a lease option buyer. You intend to buy it and then sell it on a lease option.
Anway, the first thing you need to do is find out what it’s worth after repairs. The asking price and the neighbor’s asking price are meaningless. You need to find similar houses that have already sold and use those as comps. Then figure out your repair costs and exit strategy and come back with more questions.
Yes Natalie that was my intention. Thanks for the advice. I’ve called the realtor a couple of times to ask some questions but she never returned the calls…finally I emailed her and did get a reply but not a second one. I guess she’s not too worried about it because I’m sure it won’t bring her much money. Thanks again…
Ok…I guess I need to say that I am new to all of this and am looking to make my first purchase…I don’t understand all there is to know yet… Can I not make the purchase for 33,000 and then either fix up the house then sell it or offer a lease to own purchase for someone for around 45,000…That is around the price of the house next door which is very similar… Thanks for your replies…
REO means the lender owns it. I have found lenders take a while in making decisions and try to squeeze as much out of the property as possible. Often offers have to be presented to a committee inside the bank so the usual turnaround turns into weeks for the offer and counter offer process. These are also as is sales at the price they set, so if you want to low ball them, you had best make a solid case for it.
Foundation problems are potentially ruinous unless you have a lot of experience sizing them up and repairing them. I recall one house I saw last summer where the doors didn’t look right and when I put my level on the walls and floors, I found that the house was leaning towards the center line. A quick exterior inspection revealed that there was a patch on the side of the slab right where the two halves were leaning in towards. Basically the slab had fractured down the center line and the slab was sinking which would eventually collapse the house.