All Forum Posts by: Hugh Thomas

A follow up since my initial post: I started working with a Realtor, who got for me the comparables and the transaction history for the house in question.

I think the most revealing info is the transaction history: one (now defunct) bank gave the previous owner a FHA HEL $50k over the current asking price. If this loan was defaulted, we get to the scenario guessed by J Scott

The comps, on the other hand, are indeed too low to justify the asking price. Comps are about $100-120k, asking price is over $180k. Not the 2x I initially guessed, but quite a difference. As you can imagine, there is some wiggle in the comps, both ways: not all houses have the same sqft, etc.

Now my question: as part of my d.d. I went and saw the home. And I liked it, it has some "homey" features, does require some fixes (seems that there is humitdity in a corner from the roof), but all and all a nice house that fits my needs. I would like to make an offer, but certainly keep it close to the comparables.

Anyone here with a similar experience, how did you approached it, how did it go?

Thanks

As said, I will work with a realtor and get comps from MLS. One factor that may influence comps is that this is gentrified area, with home prices that change almost by the block. This particular home sits near the edge, but definetively on the cheaper side.
Again, I thank you for your input. I'll be meeting with my realtor and visiting the home shortly. We'll see where this goes, and will report here whatever happened

The comps are mine (Zillow, etc). And I exagerated a bit, not quite 2x but a large gap nonetheless. I will work with a realtor to get comps, and submit them along with an offer IF we get there.

I thank you for your comments, but let me say that I am still a bit sceptic about the precision in the pricing. No, it is not a rural area but a large city in the East Coast. See below the pricing history (from Zillow) for another FNMA home, this one now to be auctioned. The final asking was a whopping $140k (~35%) less than original.

01/15/2011 Listing removed * - now in auction
12/23/2010 Price change * $259,900
12/03/2010 Price change * $269,900
11/04/2010 Price change * $279,900
10/01/2010 Price change * $289,900
03/25/2010 Listing removed * $369,900
01/23/2010 Price change * $369,900
12/25/2009 Price change * $374,900
08/01/2009 Listed for sale * $399,900

Thanks J Scott. I think you are right. I've been following how they price homes in our area and indeed they bring them down every 2 months or so. Some they get offers, many sit there and end up in auction where (I've been to a couple) the highest bid is ~50-60% of the final asking price, 40-50% of their original asking price. Some close, others go back to market at a reduced price, and all starts again. I though that maybe, maybe, they wanted to shortcut this process.

As I said, this is not an investment but for my own, and I may not have all the time in the world to wait. I'll go take a look to the home, and if I like it put my best and final, with the arguments above. The rest is up to them

Hi there, I posted this elsewhere, but I see that in this forum people have more experience with REO purchases. I am looking at a FNMA owned home, and may put an offer for it. Problem is, I am not sure what they expect. They are asking $180k , and has been sitting there for 2months, as comparables sell for half that. A little research shows FNMA purchased this home for $20k from the previous owner just three months ago. FNMA offers Homepath financig for this home, and I heard that inflates price somewhat, but I think 2x is ridiculous!
Sooo, my first thought would be to offer something near comparables, say $70-80k. More agressively, I could offer a premium over the $20k they put on this home. No way I am going anywhere close their asking.
My questions:
- why would they ask so much more over comparables and over what they paid for the home? Could it be that the recorded purchase price reflects debt forgiven to the seller? Maybe they paid a contractor to fix up the place after they purchased it?
- how do you think FNMA will react towards the more agressive offer?
If it makes difference, this would be owner-occupied
Thanks