What to offer on a VA Foreclosure

[Gail Armstrong]

I'm making an offer on a VA foreclosure (listed at $149,500), which has been on the market for 8 days. Based on the comps, if it were in good shape, I think it would be worth anywhere from $185-$205. I am looking for guidance in what to offer. I've been told there's one other offer coming in.

I have an agent, but I've done most of the legwork myself. Sifting through online records tonight I've discovered the home sold (brand new) in 2010 for 212,000. I'm assuming the owners stopped paying 2 years later because it was listed with a Notice of Trustee Sale in 9/12, 10/12, 12/12, Auction Notice went in the paper 12/12 and then nothing happened until another NTS 1/17 and then the VA "bought" it 4/17 for $151,000. So either they lived in it for 4 years while it was in FC or they were able to get it out of foreclosure and then fell back in again in 2016. They did pay the property taxes on it through the current year.

It needs all new floors (2100 sq ft), paint throughout, some new doors (they basically trashed the walls and floors), and beyond that I don't know. Kitchen cabinets are not in great shape, but all appliances except for the fridge are there (working or not, I don't know  - house is "winterized"). I'm estimating about $15k in flooring, repairs, painting ASSUMING there's nothing else going on.

If my offer is accepted I'll do an inspection so I'd know more then. 

I've read that HUD *likes* to net 89% of market value, but whether or not that holds I don't know and obviously, the VA is a different entity.

The obvious answer is, "make an offer based on what you feel it is worth and if you don't get it, move on." And this is absolutely what I'll do if I end up in competition, but I sort of feel that even at $149,500 that's not a bad deal so would they really go a lot lower? My initial inclination was to come in between $130 and $135, but seeing the original purchase price and what VA paid for it in April, I'm wondering if this will be enough.

Thanks for reading.