Q&A On Salt Lake Foreclosures In Draper UT !

Q&A On Salt Lake Foreclosures In Draper UT !

I get a lot of questions about how much to offer banks for their Salt Lake Foreclosures (REOs). That is a tough question to answer, and depends on a lot of different factors. IE: location.

Homes in South Jordan usually sell faster than say homes in Taylorsville.

Price range; generally speaking a more expensive home, with fewer potential buyers would demand a greater discount.

Lending institution; a lender with a lot of properties in foreclosure or pre-foreclosure in an area say like Herriman UT, might elect to discount further than normal, to avoid competing with themselves.

In other words each home requires individual research, and information to arrive at an adequate offer that can be packaged so that the bank will give it consideration.

With that in mind I am submitting to you an e-mail I received from a site visitor last week about the experience they were having with creating a Real Estate portfolio.

And of course our response.

Dear Ms. Seymour

Do you think that the bank will accept an offer that is 80% below market value? If not tell me what they will accept. I have a Proof of Fund letter and would like to make an offer on some properties. I have talked to some Real Estate agents and they are either unwilling to present my offer or there is something going on that I don't know about. Can you tell me?

Thanks

---

Thanks for your post, and your questions about Salt Lake Foreclosures in Draper UT.

I will be as blunt as I can be as I think I can save you a lot of time in your search for distressed property in Salt Lake.

No ! I do not think the Bank will take 80% of market value. Since market value means different things to different people I will assume that you are referring to the last price the home is listed for.

With regards to what They will accept, I don't know, and probably no one else does either.

A good indicator Bill is what kind of discounts are being shown on actual REO homes that have closed in the recent past.

You asked about Draper foreclosures, I pulled up all of the homes sold (closed) in the last 90 days to get an idea of what price buyers were paying versus what Banks were asking.

Of the 29 Draper foreclosed homes that have closed in the last 90 days the average discount was less than 3%. ( $12,500,000 in listings, $12,200,000 in sales). That is factoring in concessions paid by the Banks.

Since the asking prices ranged from between $173,000 and $1,600,000 dollars an investor would be more specific regarding price range.

It is also revealing that among these sales, days on market (DOM)is less than you might think. While homes that have been listed "short" may have been on the market for months, Bank Owned Homes on this list rarely were 45 days on market.

Bill, I think perhaps agents are reluctant to present your offers because based on this exercise they would do a lot of work with no reasonable chance for success. Normal CMAs do not get the job done in today's volatile market. To just develop these numbers took more than one hour. To represent you properly would take research by price, by location, by age, Etc:

If an experienced agent tells you that the property will sell for between $220,000 and $240,000 and you insist on offering 80% of that, or even 50% of that, and want to do a lot of them, then I suggest you offer to pay an agent for their time, and knowledge and experience. They probably wont be compensated for having done a lot of work on your behalf.

As far as "something going on that I'm not aware of", I doubt it.

The fact is, in most areas of Utah the foreclosure market is not anywhere near what newspapers, radio ads, and investment seminars make it out to be, and perhaps what you were told. No way this is a way to replenish your 401K in 6 months as I have heard advertised.

Where are the good deals? Right here. Right now. In most areas around Salt Lake you will find a good inventory of Bank Owned Foreclosures from which to choose. Some of these homes sold for 50% of what they were purchased for and much less than they could be built for today.

I hope this answered your questions Bill.

P.S. My advice would be, if you are serious, find an experienced agent, agree on an investment strategy that is realistic, sign a buyers agency agreement, put them to work, and be patient.

To search for foreclosed homes in Salt Lake & surrounding towns, and information about buying Salt Lake Foreclosed Homes or Pre-foreclosures, stop by Salt Lake Real Estate and you can access thousands of houses listed for sale, and tips on how to buy them.

Or you can call us @ 801-567-0946 and we'll talk about Salt Lake Foreclosures in Draper UT, or any other surrounding Utah Town.