Foreclosure Question
I am planning to bid on my first foreclosure. It is with VA. I would like to know how much below the asking price is a good amount to bid with. If there are any mentors in the N. Virginia area willing to help, I'd appreciate speaking with you.
Thanks in advance to your response.
KB
Hello KB, The price that you bid is going to require that you do a bit of home work. You will need to know about lead paint, asbestos, mold, structure defaults, comps in the area, enviornmental concerns, code violations, rehab cost, would I want to live here and the like, plus plans for the future in that area.
With that in mind, only you can say how much to bid on the property.
Vern & KB,
I need to move to your area because I have not seen the VA take under the asking price on a property. Maybe in your area they do?
Since this loan is backed by the government to the lender they are not going to take less than the asking price.
Then remember the redemption period where the person who lost the house can come back and redeem the house, I have seen this happen.
Yes, the due diligence is important as in any real estate transaction.
KB, since you go through a real estate broker on a VA bid, ask the broker you are working with if the VA has awarded bids under the asking price.
John $Cash$ Locke
Check out http://www.vahomes.org/
Not sure if your area is covered. Unless the house has been on the market for some time do not expect a bargain.
My first two home were VA but im my area they go for retail prices.
Forgot why I posted the link.
You can look up past sales. Look at the listing price an the sales price. You may be surprised.
Thanks for your inputs. I appreciate it.
Does anyone have experience in Dealing with Hard Money Lenders when it comes to buying Foreclosures?
What is your experience? Would you recommend it? Do you know of hard money lenders in the DC Metro Area?
Thanks in advance to your response.
KB
Hello KB,
In reference to your post...
I'm from Virginia Beach and was introduced to purchasing VA foreclosures almost 8 years ago. I currently have 14 rental properties and all but 2 were VA foreclosures. The VA will ask for what they believe the market will support.
I don't know about Northern Virginia, but the last few years in Virginia Beach the market has been strong for sellers the VA was getting asking price (or more) most of the time.
I have been able to pick up VA foreclosures in the past as long as my bid was within 3% of asking price. However, the market is different right now. Alot of properties are gone during the 1st bid period, so the VA has no reason to discount prices.
As far as I know their is no recourse for the original owner to seek redemption when you purchase a VA foreclosure. The VA usually sells the mortgagewithin 3 months of closing the sale.. to another mortgage company.
Hope this helps
KB,
In NoVA, the market is pretty strong right now. VA Foreclosure properties are not a bargain since they are priced at or near FMV. The real bargain with VA foreclosure properties is the financing that comes with them. VA financing requires 10% down for investors, the interest rate is 6%, and there is no PMI. There is no limit to the number of VA foreclosures you are allowed to buy with VA vendee financing -- your creditworthiness is the only limiting factor here. I have found that it is often easier to qualify for a VA vendee loan than a standard conventional loan, and the loan approval process only takes about 15 days from the day you submit your complete loan application.
The best price that I have ever gotten on a VA foreclosure is 91% of list price. This number seems be be somewhere near their minimum bid on listed properties. Though, the current interest in VA foreclosure properties in the NoVA area has created a demand that often pushes the winning bid above the list price.
Here is a link that may help you:
US Department of Veteran's Affairs -- D.C Field Office
Good luck.
[ Edited by DaveT on Date 12/08/2002 ]
KB,
here is a link for va and ky
http://vba-roanoke.com/rlc/pm.html
and the link to tell you what the letters and Numbers mean
http://vba-roanoke.com/rlc/forms/LGL26_02_14.pdf
good luck,
-Tony-
No lender can take a price less than the opening bid at the sale.
1. They do not own the property at that time.
2. The current owner could sue them for selling it to someone else for less and not working out a lesser price with them.
3. VA loans are government backed and they will get full price from us the taxpayers so there is no incentive to deal at all.
Good Luck