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.

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.