Need some direction here...

Mauiboy, I'm new at this and by no means an expert yet, but it sounds to me like you should start just by offering the 325. Then see what happens and take it from there. Hope you can work it out. tc

Hi Mauiboy:

if the property has been on the market for that long, and it's an REO, then that's a possible BIG red flag. Generally, REO's do not have running water nor electricity, so your inspector can only do what is called a "dry inspection", which can be troublesome.

Call the LISTING agent (not your agent) and ask him about the history of the property. You can usually go to places like zillow.com and the county assessor's website and check out the sales history on the property. You should find out the last owner and his purchase date. Obviously, the last owner was forclosed on, so he's not going to be helpful, nor probably nice. You want to try to find out from the listing agent whatever you can. He may actually be the SECOND listing agent for the bank, who had hired another agent who had the listing prior to the current one. If you think the current DOM (days on market) is 120, that might not be true - it might just be the current listing agent's info. Make sure the listing agent tells you that if there are any current or unforseen liens or unpaid taxes on the property, that the bank will clear that during escrow.

Anyhow, sounds like a steal. Could be a steal, however, due to the fact that the property has unpotable water, couldn't pass a Title V (septic system) inspection, and you have no idea how much it will take to get a Title V or septic system clearance because you can only do a dry inspection. Or it could be something else. Maybe there was a fire inside that hasn't been fixed up yet and you'll need a whole new electrical system, or something else. Could be a big bag of worms. To find property like that in HA for that price is very unusual.

It's worth trying to gather as much info as you can before you make an offer, but if you still want to with the limited info you can collect, then, by all means, go ahead and make an offer contingent upon an inspection and your ability to get finacing. Who knows? Could be your lucky day!

Look deep before your leap!
JennyInMalibu

Hi Bradco and JennyInMalibu,
Thanks for the responses. I know it sounds like a steal here in Hawaii, Being born and raised here and knowing the market here in Hawaii it does sound too good to be true. Zillow.com has their Zestimate at $499,000. The property is sewage lines pulled from the county so I figure that should be good but great advice on that. I will definitely need to start talking to the listing realtor so I can get better information for the property. I just really want to be prepared and not sound so unsure of myself so that the realtor takes me seriously(even though I really am) but first project after reading DG's book a few times and taking notes on the book and also being on line and getting great information from people like you and reading the great stories to motivate me to not give up. So I will ask for a showing and asked all these great questions..

Mahalo,
Mauiboy

Of course, due diligence goes without saying. When he says he has found a good deal I assume he is past that stage. Great advice. tc

Jenny and Bradco have wise advice (Jenny, I'm in awe!). Use your inspection contingency. If possible, insist on the utilities being turned on for the inspection. It might be impossible if pipes are missing or whatever, but here it's often just "winterization" that is the issue (obviously not in your area. lol). If they've been sitting on the property for 120 days (at least), they might be willing to go the extra length if you insist. And I'd offer WAYYYY lower than the $325K. 50% some say. They can always laugh, reject, counter-offer. They won't have hurt feelings. And you can start over if you want. Of course, LOOK at it first. lol Even bags of worms are fun to look at.

Just my $.02.

Rina

Hello Rina,
I first would just like to say that I have read alot of your input and stories and they have really inspired me tremendously. I value your input as well as everyone else on here. I am excited on this new venture and know that you and everyone else on here make it so much easier to stick with it and grind it out because sometimes the end of that rainbow where that pot of gold is seems to be sooo very far away...and the good thing about that is being amongst people in DG's forum.."I KNOW" that pot is waiting there for me...

Mauiboy

Are always worth $2M! You and Angela are Queen Deanies!

Hey Mauiboy, I too was born on Maui!! Unfortunately my parents moved when I was 3. Bummer! Oh well, I still have the name! I visit all the time. I might actually be moving over there in a few months to Renovate my dad's condo so we can use it as a vacation rental and eventually sell when the market gets back up. Anyway, back to your situation. Rina brings up 2 great points, as she usually does, I would also demand that the power be turned back on if at all possible. If you urge enough they will do it. Also I'd offer around 260-275K just to tell them "Hey I mean Business". If they do laugh, oh well, they could always counter offer. Buy shoot low for sure know that you're limit is $325K. Don't be afraid to low ball in this situation. You never know, they could say, um OK!!!! So do your due diligence and find out as much as possible about the property so you can bring up the negatives on your offer. Well I wish you luck and I hope you end up with the place. Go for Gold!!!!

Kai