I have been an expert on this site since 2007 and am the lead expert in my field. I have an urgent question.
Yesterday I saw (in Ulster County NY) a home owned by a bank (foreclosed). It is under professional property management (winterized, lawn mowed, etc.) The asking price is $52,000; the assessment (this Town is notorious for ridiculous assessments) is $127,000 (based only upon exterior of house which could use some trim work). Interior requires: new furnace, all carpets removed and replaced (or wide board floors restored); wood stove was removed from kitchen so replace or remove pipe; perhaps new refrigerator (if thorough clorox cleaning does not do it); minor cabinet repair in bathroom under sink. The remainder of it is purely cosmetic (painting) which I can do (I gave my home on Long Island a world class paint job top to bottom, 1185 SF, in 2000 by myself). I figure the total cost (at most) would be (if I offer $50,000) $60,000. This is more than half of what I have in the bank, however: within six months of moving in (after floor replacement in kitchen, rugs, etc.) this house will then actually BE WORTH what is has been assessed at. On March 1, I can grieve the tax assessment and receive a double star exemption because I am over age 65 which will literally cut my taxes in half ($4200 now, school taxes are at least half of that).
I would like an opinion about how long it takes for a bank owned home to go to closing; if I offer $50,000 will the bank readily accept that offer; if engineer finds egregious problems, can I then withdraw my offer? I'm single, lost my daughter and only child in March, 2011, and I need to get out of the apartment I'm living in and really want my own space, but I'm frightened. Can you help me before I go back to the house tomorrow?
First rule is to put away all that junk on the Internet. After being in business in and around Milwaukee, a rather small market compared to some cities, I have to admit markets surprise me some times. I've seen some neighborhoods actually double in price in a few months while others are still stuck in a rut after years. Every city has markets within markets.
You need to find a good and honest Real Estate Agent. More often than not, agents on those web sites pay a fortune for top billing on those sites and need to close a few deals a month to pay for advertising. So they may be more interested in high pressure sales than serving the public. Ask a few friends about an agent but don't look for an overly aggressive one. That can back fire. No one is going to negotiate on a govt owned Fannie Mae, Freddie Mac, or HUD foreclosure. All prices are computer controlled by a billion dollar computer system anyone else could have put together in a few hours. If it is offered by a local lender you may be able to negotiate but they want to see cash down and a good loan pre qualification letter from a local lender.
The only rule of thumb on foreclosures is, good buys get multiple offers in a few days and the aggressive agents have buyers overbid and over pay. A good agent will go on their MLS service, locate the property, draw a circle of about a half mile around the property and look at active units and properties sold in the past few months. This will give you an idea of the actual market in the area. You don't want to see a lot of other foreclosed units in that area. Like I said, the market can be one thing on one side of the street and totally different a few blocks away.
Closing on govt owned homes will cost the buyer about an extra $1000 at closing. A good agent will tell you that. You do have the option of an inspection. A good agent will provide a list to call and interview. Go with the old school inspector. They use experience over gadgets and many know the history if the area to give some great advice. You'll have to pay a security deposit, which should be refunded if the property fails inspection. In Wisconsin it has to be something major that drastically effects the value of the property. Oh and watch out for so called foreclosure experts. You know the old saying about opinions. That defines anyone claiming to be a foreclosure expert.