Misty Wing
Misty Wing
4 years ago

If a forclosed home is only worth $50,000 and they are listing it for $85,000, but it needs AT LEAST $25,000 in repairs, can you put in offers and tell them things are wrong with it??

I looked up the tax rolls on the house, its only worth $50,000. They have it listed at $85,000 because the person it got forclosed on financed it twice and thats all the people who own it now are seeing. It needs foundation work, insulation, electrical work, plumbing, carpet and paint, and that could rage from $20,000-$30,000. I have heard you cant put in offers for forclosed homes, do you think they would make an exception?
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Greg S
Greg S
Real Estate Professional
1 Like
0 Replies
4 years ago

In short, of course you can offer whatever you like. Remember the bank likes to loan money, they are not property experts.

If you are licensed contractor then state your license details and list the repairs you seem necessary. If not then find a licensed foundation repair company, electrician ,plumber etc to give you repair estimates for the work needed (multiple estimates are better) and submit those estimates in with your offer.

The next step is research local sales in the area, see what prices other houses were selling for. You can use zillow, but as Texas is a non-disclosure state the results may not be accurate enough. You may want to find yourself a realtor who will run a CMA report for you. I can recommend a realtor if you like.

So why did the bank set a price of $85,000? When a bank takes back a house at the foreclosure auction they hire a Realtor to do a Broker Price opinion (BPO). This is low paid - about $70 - so quite often the Realtor doesn't even go to the property, or if they do, they just "drive by" ie look at the outside appearance. That realtor may think the price is fair and obviously the higher the listing price the more commission they would make.

I usually use the city tax value as a guide. Actually, if you do buy the house, then the lower the city valuation the less RE taxes you would pay!

Hope this helps.

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