Priced way below and want to know why?

Mabeka you need to know more about it who is offering it, are there liens,back taxes, etc. find out everything before you move forward.

Thanks Jim,

So far no back taxes and I looked at the recorders documents so far no liens. This is an REO. The bank is offering it at this price, GMAC. I got a request for best and highest offer for our bid. Thats why I am questioning it LOL. My agent says there are multiple offers on it and suggested we offer higher than list price by 900. My original offer was $57,000.

Is there another place I can check for liens besides the recorders office? If it is bank owned don't the liens get wiped out? What other items should I look out for? So far no code violations either.

for foundation issue problems at all? What is it built on? Has anything been found it was built on such as an old dump or oil well? Was there a murder, rape or other serious crime committed in the house or in one of the nearby neighbor homes? Or, the bank might just be wanting it off their books before the end of the month.

If you have a title company on your power team you can have them run a preliminary title report, but usually an REO is clear from most things except tax liens. You could also try talking to some of the neighbors about the house and neighborhood.

Could be bank has alot of REOs to get rid of....or it could be an over estimate on repairs needed...or an undervalue appraisal, calling it a 3 bedroom instead of a 4 bedroom. Matt has talked about finding deals such as this.
Do your due diligence, as you are doing....then go for it!
Deb in OK

Oh wow! how do you find that out? Do I just look for news in that area? Do I search the address? Do I ask the police department?

Deb I think your right because it is listed as a 3 bed when in fact is is a 4 bed it just needs a bar in the closet for the cloths to hang on.

Question? how do you find out the real value with out getting an appraisal done? I do have the compareables but they are few and far between. The highest is $130k but the other one was for $118K. All of the others are 100k and below.

There is a new subdivision near the property that has homes selling for 200k and above. Could this be the reason it is up so high?

Also I notice a trend here in KC is that the tax assessment is almost always way lower than what a property is worth. Could the tax assessor be wrong?

I talked to my realtor about it and he says that the property should sell fast for $120k. But I do not see anything to back that up. LOL am I going in circles?

Mabeka if is a REO Tammy is right only tax liens remain on the property. The rest you can get covered for with tile insurance. Look in the windows see what if anything you can see of damage,etc. Don't take to long to check it out or it will be gone. Good Luck.

From what you have said it sounds like this property would have a quick sell ARV around $115,000.
Agents on REOs ALWAYS say multiple offers, highest and best. Check in 2 weeks when the thing is still on the market and ask what happened to those multiple offers. I always offer what will work, if it's not enough (someone paid more) I move on, no problem.
Makeba, what if a property appraises for $150,000 yet the listed, sold and under contract comps average $115,000 and DOM is 90 days and you want to be able to sell quickly. Is the property worth what it appraised for?

Lets use an ARV of $115,000 at 65% minus your $26,000 re hab budget.
Your offer price is $48,750
At 70% your offer would be $54,500.
At $59,900 plus $26,000 rehab you would be at 75% ARV. Acquisition cost total$ $85,900

Sell For $115,000 minus 12% sell costs = commissions, closing costs, insurance, utilities, hold time, cost overruns.= $13,800 = $101,200 gross profit minus acquisition costs = $15,300 net profit if you do the flip. if you wholesale it your fee comes out of your buyers net profit. A very skinny deal at $115,000. Hopefully it will actually SELL for $130,000 of better to make a deal you can pass on to a buyer if that is your strategy.

Are you going to buy and hold, fix/flip or wholesale it?

If the sold, currently listed and under contract comps actually indicate a quick sell price of $150,000 then 65% minus repairs = $71,500

Get a CMA for your realtor, have her prove the value!

Good luck!

Michael Mangham
MD Home Acquisitions LLC

I got a CMA on the property and it is showing 99k ( different realtor by the way not the one I put in the bid with)

DOM is showing at 112 yuck

Is he just making the property look good by inflating the numbers. Oh yeah and on zillow there was an exact match to the property in better condition trying to sell it for $115,000 it was listed for 256 days on zillow ( and investor of mine pointed this out to me). Two other properties that match it are reo's one selling for $59,000 the other for $79,000. Both on market for 50 plus days.

This has answered all of my questions. thank you everyone for your responses.

Micheal absolutely the numbers do not work at all. This one is a dud.

Offer on it anyway, for the right price it is not a dud! Looks like $100,000 is pushing it, but possible if the $26,000 re hab really makes it shine. Offer $39,000 and explain why to your agent. Won't hurt, check back in a couple of weeks when your offer is not accepted the first time.

Michael Mangham
MD Home Acquisitions LLC