In many instances HUD homes are now being priced well below the market. Some people are getting the misconception that they can by them for pennies on the dollar which may have been the case as late as last spring but now we are seeing them pricing way below the market and getting multiple bidders on the properties and at times getting more than what the listed price is. This is a tactic that I have seen used before to force multiple bids and if the owner occupants do not get them, which they are guaranteed to get a loan on for HUD homes, then the investors come in and it is a bidding war as well.
Foreclosures are another story. The bank has an agent to perform a BPO on the area to see what the home would be worth if in great shape. Then the bank looks at what they are owed and prices the property at a somewhat good bargain but normally higher than what a HUD property might go for if they were in the same neighborhood. Banks will dicker over 100 dollars if you try to go in too low and sometimes here lately they will come in at some strange number like 34327.00 when the property was listed at 35000 as the counter offer.
Foreclosures all go back to how much the investors (in the bank) want to loose on a property.
With that said every property is different. I have seen a bank owned (foreclosed) property worth 1.4 mil go for 374k. I have also seen a property priced at 89k go for 105k. We just have to look at each one on an individual basis.
But it appears now that sellers in our area are not in as bad of shape as they were in late 2008 and all of 2009 and 10.
For more information contact your Eco-Broker below.
Rick Hogue REALTOR, CDPE, EcoBroker
The Hogue Group
A Place to Hang Your Hat and Call Home