REI anyone want to help walk through this with me?

3 Replies

Hello - A property I've had my eye on for a while just came on market in my area, it's bank owned. Back taxes are $16K. Asking $350K, 1800 SF; definitely needs $100K+ reno, really could use a gut reno, although roof looks good. It was a 2-Fam, now listed as a SF, probably addition is not to code, or was illegal. Bldg Dept said can't be 2-Fam. Appraised value $257,00, building portion value $65,400. Comments on assessment say: No Heat, and one bath not working. I'm not afraid of a big reno, just want to get pricing right. I'm coming up with $179K for an offer. "Comps in area would sell around $375K - $400K.

If the bank is asking $350K its highly unlikely they would accept an offer of $179K.  I'd be surprised if they even responded.  They might come down a little, but only a few percent off their asking price.  If it doesn't sell, over time they will drop the price.  You can try putting in your offer after each price drop.  But you're a long way apart.

I bought bank REO's and this sounds unreal.

1.) Unless it's sold free and clear, you'll have to pay the back taxes of $16K.

2.) You say they're asking $350K with an appraisal of $257K, right?

3.) If you're silly enough to pay asking $350K, add in back taxes $16K, your're at $366K, for something appraised at $257K.  You're not even looking at renovation costs yet.

Is the bank selling through a realtor? When I bought foreclosures, the bank wants at least their mortgage paid, else they sell at auction. Usually. they try to sell through realtors before then. I once bought vacant condos after they couldn't sell them all at auction through a realtor that the sponsor used, asked for more money than the ones sold at auction. I bought one at auction, so I know it's crazy. After a long argument, the sales agent said, OK, just put an offer in, you're wasting your time because it's be rejected. Well, my offer was accepted. The way I put it to them, it's take it or leave it.

Since your $179K is so far off, and the property haven't gone to auction, I can see them rejecting it, and eventually the property goes to auction. In my case, the property was already auctioned unsuccessfully and I have a good case of the proper value.