Earlier in the summer I penned a blog titled Can you find me a good Foreclosure Deal? In response to continued questions from buyers, I decided to do a double check on some numbers in the 22152 zip code (random choice) to see if good deals were beginning to surface. First for those who are not familiar with Fairfax County VA this zip code is in the West Springfield area. The area has mature neighborhoods with loads of trees, is in the popular West Springfield HS pyramid and has easy access to public transportation for DC commuters. Currently there are 74 homes for sale in the area ranging in price from $407,900 to $948,500 and in those homes I quickly found 12 homes listed as “short sales” or in foreclosure. I have visited a few of these homes so I can say that the condition varies from excellent to needs significant TLC.
Then I compared the prices of these homes to properties that are still owner occupied to see if there were any bargains in the group. So far the answer is still NOT REALLY. As a side note what I did find were some fairly significant price differences between the same style homes. For example, I visited these two homes in the same neighborhood, both have updated kitchens, hardwood floors on main level, cathedral ceilings and large fenced yards. Yet there is a 100K price difference. Wow, someone isn’t paying attention to the market and the comps.
In each of the neighborhoods where there are short sale properties I can take a buyer to the same style home with a similiar price point and not have the issues with dealing with the bank process. In addition the buyer has a chance of getting a response in 24-48 hours, receiving some seller subsidy and having a home inspection. With a foreclosure it is Cavaet Emptor.
In the end it is up to the buyer to decide if the price is right but for now I don’t see the banks making drastic changes to their prices or procedures to help unload some of their unwanted inventory.
My experience in dealing with short-sale listings through realtors has been that the price listed only tells me that the bank is willing to entertain the short sale. It is their opening salvo. Most properties in this area have first and seconds (an important point to keep in mind for negotiation), it is important to determine which position is foreclosing. After negotiating, and depending on the condition of the home, (and yes hassling with the bank) – the discounts can be significantly lower.
Thanks for stopping by. I think as the bank inventory rises they will figure out that they need to respond faster to offers and be ready to bring the prices down to at least market rate. Prices are still higher on some foreclosures than on other local sales.
[...] After writing Foreclosures are an Elusive Prey last month I had a call from a prospective investor who wanted to learn more about the foreclosure process. Each state has different rules for the process and in talking to three different lenders it was obvious that their processes for getting homes to the courthouse steps are slightly different as well. Since I am not a lawyer or an expert on foreclosures I went looking for information and found the United States Foreclosure Law site. This information is specific to Virginia. If you are outside Virginia you will want to go to the site and look up your state for specific information. [...]