Buying A Charlottesville Foreclosure – Part 1

Everyone has listened to the news and is familiar with the growing number of foreclosures across the country.  While Charlottesville and Central Virginia do not have as many bank owned properties on the market as are seen in many parts of the country, we do have them.  Because of the possibility to purchase a Charlottesville foreclosure for a very good price, there is a lot of interest in these homes.  We see both investors and buyers looking for a home to live in themselves who are curious about the foreclosure market.

What is the foreclosure market like in the Charlottesville area?  What kind of REO properties do we have in our real estate market and what is involved in purchasing one?

This is the first in a series of videos on Buying A Charlottesville Foreclosure.

Copyright 2011 by Pam Dent, all rights reserved “Buying A Charlottesville Foreclosure – Part 1“.  Written by Pam Dent.

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Buying A Foreclosure In Charlottesville – How Much Should I Offer?

In the current real estate market I am often approached by folks who are interested in purchasing a foreclosure.  Bank owned properties can provide the opportunity to purchase a home at a discounted price.  However people are often surprised at what exactly that price may be.

You have been hearing on tv about the glut of foreclosures.  You know that the banks need to get these homes off their books.  So it makes perfect sense that they would be happy to get anything for the properties just to get rid of them…wrong.  The banks want to get as much as they can for the properties.  They have a figure that they want to get for the home.  The home has been priced according to a brokers price opinion based on market value and condition.  This is usually less than comparable resales that are on the market.  The Charlottesville foreclosure is already discounted and the bank usually will not take 30 cents to the dollar on this discounted price.

When the home comes on the market as a REO it is listed at a price based on a BPO.  If there has not been an acceptable offer, the bank will periodically reduce the price.  When the price of a bank owned home becomes attractive, offers come in.  It is not unusual to end up with multiple offers and we will see the home end up selling for over the list price.

This graph shows the sold to list price ratio of foreclosures in the greater Charlottesville real estate market.  Note that this ratio is based on the sale price as compared to the original list price, not the final reduced price.  You can also see how much lower the REOs are selling for compared with the conventional sales.

As you can see the foreclosures in the Charlottesville real estate market are selling on average for approximately 82 – 88% of  the list price.  Yes, you can make an offer, but don’t expect to be able to get the property at 1/3 of  the list price.  I am not saying that it never happens, but it is not at all the norm.

Copyright by Pam Dent all rights reserved “Buying A Foreclosure In Charlottesville – How Much Should I Offer?“  Written by Pam Dent.

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The March edition of my newletter Charlottesville Virginia Real Estate News is hot off the presses.

You may be interested in reading this issue which deals with the following topics:

• Buying a distressed property, foreclosure or short sale, takes patience.
• Why it is important to verify the information in the public records before putting your home on the market.
• Selling your home – Find out what improvements are cost effective.
• More information for sellers – Spring cleaning for the exterior of your home.
• Make sure you understand disclosure requirements when you are selling your home and avoid a lawsuit later.

Read Charlottesville Virginia Real Estate News.

If you would like to subscribe to the newsletter, email me at pam@pamdent.com and I will put you on the mailing list.

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Many people are exploring the idea of purchasing a foreclosed or bank owned property. They have heard stories of great deals to be had on buying a REO. And while these homes may be obtained at a discounted price they may or may not be a great deal. Usually these homes will require some amount of remodeling. Every now and then you find one that is in move in condition, but more often than not extensive remodeling is required to end up with the home of your dreams. Even if the home looks good on the surface the homeowner who was struggling to make mortgage payments for a time before the home was foreclosed on has probably deferred maintenance on what may be crucial systems in the home. Before you make the decision to buy it is necessary to carefully weigh the hidden costs in order to answer the question “should you buy a fixer upper”.

If you woud like a list of the foreclosures for sale in a particular area, contact me; I would be happy you a list of Charlottesville foreclosures for sale.

This article may provide you with some helpful information.

How to Assess the Real Cost of a Fixer-Upper House

When you buy a fixer-upper house, you can save a ton of money, or get yourself in a financial fix. Read

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Fannie Mae and Freddie Mac have given overextended borrowers a Thanksgiving present.  The mortgage giants have temporarily suspended foreclosures through January of 2009.  They have directed their loan servicing organizations and attorneys to suspend foreclosure sales and evictions on occupied single family homes.  This has been implemented as support of the modification program which was announced on November 11 and is due to begin on December 15.

Inman News has published an article going into more detail on these new developments.  According to the article "Fannie’s streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure."

This new development should offer a chance for many borrowers to keep their homes and avoid foreclosure.  According to Inman Freddie Mac expects to approve workouts on 84,000 or an estimated 140,000 who are delinquent on Freddie Mac owned mortgages.

To read the article click here.

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