Probably about half the calls we get every single week are on bank owned property. Usually the person on the other end of the line is wanting to find the perfect house at a DEAL. The pictures look amazing. The neighborhood is perfect. The price is half of what the rest of the houses are selling for. The problem: If something looks too good to be true, it usually is. We then set the appointment to see this gilded house only to find parts of it missing such as the appliances, the roof, the doors, windows, etc...I have even seen a missing toilet tank cover.....Now really, who does that????
The conversation we have over and over and over again is the standards needed to buy a home with an FHA or VA loan with a property as opposed to the condition of the property that looked too good to be true. What comes next? I hear that they just want a deal. There are more ways to get a deal than buying a broken house. This is not an episode on TV. This is real life. Basically, it comes down to math. You heard right, MATH.
Here is the gyst:
A deal is basically a purchase of a property where the buyer pays for the property less than the value of the house is. Really, what you pay for the house is probably going to be the current value of the property, given that most people will not pay more than they have to on a property. Property value is determined by appraisers to simply be the value an average person in the market for a house like the subject, would be willing to pay. You can see the problem in creating a deal. The value is basically what you would pay for it. So how can you ever get a deal? Hard Work, area prices rising, replacing appliances, to name a few.
The math is simple:
Cost to purchase the house: $$$
Cost to close on the house: $$$
Cost to repair the house: $$$
Cost to hold the loan until sell (Average days on market is about 80 days): $$$
Cost to Sell the house: $$$
TOTAL all these to find your all in cost.
NEXT, figure out the full market value when you sell the home after you make necessary changes. Multiply that by 96% because houses in our market usually sell for 96% of value. The price you get on the house minus the costs is your profit. A great deal has a profit there of around 40%.
For more information about finding a great deal in Lawton by working with teh Wright Team, contact us at 580-647-8281.