Help On Offering This House!
hi,
Here is another house I am looking. 35 years old, 3 beds, 2.5 bath 1600 sq with 2 car integral garage, first floow has den, living, family room, dining and kitchen and a powder room. it is a unusual mutilevel style(you can almost think it is a two story) sold in 2000 for 179000, which i think it is over paid(it should be around 170000 back then). Tax $5k a year. The bank is asking $177000.
Fixes are: inside out painting, carpeting, a real nice cleaning inside and outside the yard(a couple trees needs to be removed), gutters reclean, a couple pieace of siding fell off, new roof, new airconitioning, kitchen countertop. Previous owner is half way in finishing the basment, dry walls are up, wet bar is built up but just like raw wood without top or siding, plumbing is inplaced but no sink or anything connected.
The realtor advised me starting bid price should be 15% less than asking price. I am like ???
My questions are:
1. Can exterior painting be done in winter?
2. Can roofing be done in winter?
3. I am planing to start offer $140k and no more than $150K in cash, how do you think?
The FMV is 180k-190k
thank you[ Edited by world888 on Date 11/11/2004 ]
Quote:
My questions are:
1. Can exterior painting be done in winter?
2. Can roofing be done in winter?
Yes, you can paint and roof in winter. In Florida it might be 80 degrees on a winter day. Go to HD and pick up a can of paint and read the application insturctions that tell you the range of temerature and see if you are likely to have those temperatures where you live this winter. The same for roofing.
i live in Pittsburgh, Pennsylvania
Yes, roofing can be done in the winter. But you should try to get it done when the temp is above freezing. Otherwise, the nails will compromise the integrity of the shingles when they are driven into the shingles. There is a low temperature paint you can buy to paint in cold weather. But the paint is more expensive.
Dave
thank you Davidzora
I live close to USC too, Peters.
One of the realtors I use was formally a paint chemist (read=boring to me...lol) but he told me that paint temeratures should be above 60 degrees for 48 hours after painting to allow time to cure.
He said there is a product you can mix with but he doesn't recomend using it.
He went on to explain the molecular properties of paint and how paint is made up of 3 types of molecules, etc, etc, etc. Basically if you paint below a certain temp, the paint does not cure and water seeps into the siding, etc and can cause moisture problems.
Oil-based paint is a little more forgiving of cold installations.
You're talking $20,000 worth of work on this house...plus holding and sales costs.... Are you sure you're going to make any money on this thing?
if you buying a rehabb. project to rehabb. i would make sure i knew what , in terms of $, it takes to complete and buying a uncomplete rehabb. project means "deep" discount to me because the owner is giving up for some reason, most likely money, and wants out now..........km
thank you for the input.
This is my first try of rehabbing. i realized the cost will be 25k and up. It is really hard to find a deal on reo these days. i am competing with end buyers as well. There is a similar house in the same street sold for $170k in 2001. I don't know how the inside looks, that is why i am assuming this one should be around $180k-190k. Another thing is i cannot do outside work until next spring, that makes the holding time even longer, i don't think i can ad the house or make any curb appeal for several months until spring comes.
I looked at the house again today and the kitchen is not great, it could be torn down and redone. but that will add a lot more to the cost of project, tough..... my goal is to get started not loosing money on the first rehab just get exprience. my husband says if i offer 140k, the bank won't sell it and the realtor said the bank normally won't even consider the offer if the offer is 15% less than the asking price and he said there are two appraisals(one from bank one from the realtor) so close to the listing price 177k,
don't know what to do, definitely don't want to loose money on the first rehab and get discouraged!!!
by the way found another full bathroom down the basement so the house is 3 beds and 3.5 bath
sounds too skinny. look elsewhere.
Don't rush into things. To make money, you need to patient. For the amount of money you are risking, and the amount of work you need to do, I would walk away from this one personally. You have too many "ifs". What if you have to hold this for 6 months to a year. I would practice on something a whole lot cheaper.
World,
I would pass on this for sure!! Let us know what you do..
Scott
thank you for all the kind replies!
I would like to give everybody a update on this. I offered 147k about 10 days ago and yesterday bank came back with 170k, the agent say i can counter offer. I am not going to counter offer. I am going to pass on this one. i don't mind to live there myself that is why i offered 147k.
the agent said he would give my 1k deposit back.
Question, do you guy put security deposit in when making offer to the bank?
thank you
World,
I think it worked out better for you so congrats. Never fall in love with a house. I put a deposit on an offer, but some do not. If it is not accepted it does come right back. Good luck on you search.
Scott
You might counter that this offer is good for 30 days just to show that you aren't willing to budge on your pricing.
dnvrkid
Can I just go back and tell them i am not going to stay with my offer and gave some numbers to them to support my number see what bank would say?
Bank is not being realistic, the FMV is only about 180k and fix is around 25k+, 170k is not going to work with anybody, not just investors!
The house is just listed for no more than 20 days, i am probably is the only offer they have now. they may get more offers when days pass by and they may reconsider their conunter offer the longer the house sitting in the markert (which i doubt it since it is in a very nice neighborhood, somebody will make a offer)
some more update on this post.
About two weeks ago, i was told by my agent that bank won't sell it for lower than 170k, now as of today, bank lowered asking price to 168k. i don't know when they did but now it is 168k. Isn't it radiculous?
I start to think that they discriminate me because i am not an American!
some more update on this post.
About two weeks ago, i was told by my agent that bank won't sell it for lower than 170k, now as of today, bank lowered asking price to 168k. i don't know when they did but now it is 168k. Isn't it radiculous?
I start to think that they discriminate me because i am not an American!
My advice to you is to forget REOs in your market. Your market it too hot, the banks don't care about working with investors, they have plenty of retail buyers for their properties. All the numbers you posted point to this. You won't be posting stories here about buying REOs that are listed at 200,000 for $50,000 like the gurus want everyone to believe. You are going to need to skip up the food chain and get to the properties before they become REOs.
some more updates on this house----
The bank lowered the price again this pass weekend to 160k.
since it first listed from Nov,2004 till now, price:
176k - 168 k - 160k
Should i resubmit my offer again, lower than my original one?
We think you may be too emotionally attached to this home. Here is our recommendation. If you decide to place another bid KEEP the original offer price yet give yourself a closing date in the Spring. This will satisfy the warmer temperature requirement for exterior painting and appropriate marketing of the property.
Eric & Rosa
[addsig]
I have been talking to different realtors recently on weekends when I go out and look at open houses. They all say the market has been slow since October. Now holiday is over and mortgage rate is still low, they are expecting the market will pick up a little
The reason I have my eyes on this house is it has one of the best school district in Western Pennsylvania. The township is called Upper saint Clair. DAVEZORA is from this area, he should know very well. For the worst happen that If I cannot sell the house after I fix it up, I can live in it.
I am new to this rehab thing and I would think I should stay focused on my surrounding area when I first get started. It is true, in city of Pittsburgh or some neighborhood and where I work and used to work (point breeze and west deer) you can buy houses really cheap and make fair profit on.
Pittsburgh has never been a hot hot market in real estate, but like other states price has been going up and up steadily in the past several years. My next door neighbors house value has been up 70k in the past three and half years. This is nothing for people from California or DC, but hey it is big in Pittsburgh.
I have not looked inside of the house for 2 months I probably will look it again before I resubmit my bid.
I have been reading this forum and asking questions. I really appreciate everybody’s ideas and advice.
I have read Kevin Myer’s book too. It says resubmit the offer until it is accepted or sold to somebody else. Of course this is based on it can make a profit on!
Good Luck with your offer. The Realtors in your market are somewhat correct. Almost everyone goes into the "holiday mode" from just before Thanksgiving until New Years. Typically the only people buying during these weeks are the people who HAVE to buy. But January in my experience brings out lots of people looking toward spring and hoping to move when the nice weather starts. If you are looking in Upper St. Claire, it is a fast paced market. I did some checking on the MLS and if your interested in the house I think you are, I am assuming your agent told you it sold in 2000 for $178,500 in 29 days, conventional financing. This particular street seems to be a very desireable one and for the most part homes sell quickly. Perhaps it is the condition that is holding it back, but like I said you can plan on seeing an influx of new buyers hit the market very soon and you may find yourself competing with other bidders. So keep submitting your offer.
thank you for your reply. that is exactly the house i am talking about. i had the listing from 5 years ago, it was sold in 29 days. The new owner did not maintain the house at all since they have been forelosed every single year since they bought the house and eventually they lost it. So it is a mess now!
I wish we can work together someday and get some deals done!!!
Have you increased your initial offer ? If not, you are still at 147K and the bank has come down to 160k; is this correct ?
I would do the following: go into the house and make a detailed listing of what is needed. If you have a contractor that can go with you so much the better-
With your list attached, either resubmit your offer, or bump it a little bit (150K ?). Include evidence that you have the money in hand or are preapproved. Give the bank a 5day deadline to reply. Request a spring closing and that you want access to the property after you have a ratified contract.
By doing the above, you are showing the bank that you are serious and patient. Both are attractive to the bank.
If the bank balks or substantially wants to change the conditions, walk away. There are other properties.
Good Luck !
Here is something I saw here this year. The bank was asking 550 on a property and they accepted an offer for 90K over asking price with 87K going back in concessions to the buyer. The buyer then had money to rehab with.
AN interesting situation by any means. I used to think that cash was king but anyore it is is the higher offer that wins out and not always the cash one.
[addsig]
by the way, just a little update on the condition of the house. i did looked at the house again before i resubmit my offer. The condition is getting worse. Back storm door glass is broken, It must have mice currently living (or past ) in the house, i saw the mice poops. The basement(partial finished) drywalls now have mold growing from the water leak due the main shut off was not shut off completely at the begining, but no muddy smell yet. All the interior doors are gone, that is weired i thought i saw the doors before because i was thinking those are nice six panel door??? All light fixtures are gone which i knew.
Pittsburgh has had a bad rainy(snowy) days in the past few days. Roof looked bad, but no leak yet??? Of course i did not go up to the attic to look since there is no pull down stairs.
Hey Writergig, what "fake" granite countertop at Lowes did you use? Are you talking about laminate with a granite pattern or ? Let us know, thanks!
Congratulations on your deal, I would agree with the previous posts, spend only what you need to.
What are your intentions for this property?
You will have about 50K invested in this between buy and rehab
When you factor in holding costs and insurances, you see how close you will be working, especially if it is your intention to rehab and then resell. If it is your intention to resell, then you will have selling costs as well, either FSBO or through an agent which will cut into the profit. You say the house will appraise at 63,500, but what will it sell for? If you plan to hold the property as a rental, what can you get per month?
For me, this deal is too thin. Either way.