Bank owned foreclosure.....pre that a term? LOL

I am still working on knowledge here. So I wanted to ask a couple questions about a house I have seen.
House is bank owned
Has been on market for well over 6months
Has been reduced 5 times, started just reducing 10k @month,then 30k @month. Started at 520k now at 399k.
Now price is at 30k less than it was last purchased at.
Outside of house looks good/some gardening & touch ups/nothing major
Inside haven’t seen yet/LM with agent to go take a look at
It’s a corner house, near a nice golf course.
The city is very nice,not a high crime area, this house is on the border of where the city is trying to upgrade/just added sidewalks(this area was the only one without in city before)
House is 2 story 5000sq ft lot, 2 car garage, fenced yard, 3/1 upstairs, 3/2 dwnstairs, 2182 sq. might be before additions were built(that’s also a ?? where would I find out if work was permitted & added to actual value of house?)
oh, also they have been holding this house the whole time vacant.
How would I find a Value for a house where there is none this size in this area to compare with sold recently or for sale now?Most are 3/4 bd & 1/2 bath.

house sold within last 2wks
3/2 1158sqft around the corner(literaly 4 houses away)sold for 322K
3/2 1294sqft about .04 miles sold for 305k
The other houses about same bds & sqft were sold Sept/Oct/Nov 07 so I don’t think those even matter.
Theres also another house that sold this month thats .50 miles for 489k & that was 3/2.5 2,035sqft.Again, don’t know if that would help with any kind of analysis.

Ok… I know… that was probably overkill. Even though that’s alot of information, I am aware that that might not be all the correct information that an initial analysis needs. Hey, that’s why I am here to pick your brains so that I can know what I am looking at when I go out there. So, now would this be something that I should even go see the inside? If the inside is just simple repairs(paint/carpet type stuff), what kind of offer would be workable? Too broad a question,huh?o.k. since I am familiar with this area & could get a ARV of say 320k, what would be a good start offer? I know the 65% rule, still a little confused as to what would be the best vehicle to turn over, SS/wholesale? Also, could even live in it if we had to. We rent now & are looking for a personal residence, just don’t know if we want this one for that purpose.But it does give us some comfort in case anything goes wrong.

Whew!! sorry about the loooong post. Just want to know what the heck I am looking at, so I can grow from the ground up. Thank you all for your great input!!!

I was just checking back to see if anyone replied & realized I made a big typo…ooooops ;D The ARV on the house is supposed to read 370k… Thanx again!!

You sound a little all over the map with your exit strategy here. You really should look at the inside of the house. There may be a reason that it has been sitting on the market for so long dropping in price. Could be mold, busted pipes - you just don’t know. That can give you leverage on your offer.
As far as comps go, you can judge on a price per square foot of the solds. Those other comps ranged from $235 a square foot to $278.

If you sell your house for $370K, that would be about $170 per square foot, which is quite a bit below the average for the area. How did you come up with that ARV?

Thank you so much for replying, I thought I was alone. j/k
Yes, I am definitely all over right now that is why I was looking for help in what exactly I am doing. Thank you again for any help/insight you can offer.

I did look at the inside of the house yesterday, by just looking at it, repairs only appear to be all cosmetic, paint, carpet or flooring. It has alot of safety items like fire extinguishers,exit signs, actual fire alarm(like the ones in schools) so I think it could have been a senior home care or something to that effect. I know that I would have to have an inspection to check out the plumbing,electrical & all the other goodies, but from looks,just needs a lil TLC.
On the comps I really was going low on the price(i still need to learn,alot), because until I had seen the condition of the inside & found out if the added rooms were permitted, I really didn’t know exactly how that should work. I called the county & it is listed as a 3bd 2 bath,the county has 1 permit for 717sqft room addition & 1 permit for a porch. So 3bdrms(or at least 2)are not permitted & 1bthrm. It’s listed as 6bd 3bth.
So does this make a difference in how the comps or the ARV would be figured out? How would I figure that out?
What, if you know would be the future problems of non permitted rooms?

Thank you Lorik & anyone else who can set me right or at least in the learning right direction!!

Non permitted additions shouldn’t be advertised in the sale of the home, or be considered in its valuation - an appraiser won’t acknowledge those additions. I would speak with the city, or county or whomever does the permits in your area to see what (if anything) can be done. This will change your ARV, since the house is technically much smaller in value than it is on paper. What’s the zoning on this house?
Figure out a budget of how much the repairs will cost. I am not so sure this would be a good deal unless you got the house for a really low price. I would compare it’s square footage to those 2 recent comps. It seems priced over retail value as is. One thing with homes is you don’t necessarily want one that sticks out a lot from the others in the area. It makes it very hard to value.

My tax assessor has a record of when building permits were issued and whether they were finalized. It’s on line. If your assesor doesn’t, you are going to have to go down to the office where building permits are issued, and have them check their records for you.

I think the house sounds interesting. What do you intend to do with the house if you get it?

You can not short sale if the bank already foreclosed and it is REO. You are buying the house directly from the bank, and they will want to know where the money is coming from before they accept.

If you don’t have the money to buy it yourself, you must have a buyer all lined up and ready to purchase the property if you can get the bank to agree to a price.

I don’t know the zoning, I will be checking today.I wanted to make sure that I explained it correctly, it does have a permit for 1 room that the sqft is 717, whoever added this room then split that room(717sqft) into 3 seperate rooms. So would that actually change the ARV? The square footage noted on the house is correct(2182sqft) however the add on was not supposed to be split into 3 seperate rooms it’s only to be one room addition. So does it matter on the ARV the amount of bedrooms as well as the square footage or just the total actual square footage that matters? Gosh, I hope I explained that alright. Thanx

I will call the assessors today & check if permit was finalized. I would either find a buyer if all ends up looking like it would be a good deal or if I have thought about getting it for ourselves.We have 5 kids & 2 that don’t live with us now, who might come in the near future(prev marriage) So it actually might be a blessing, having 6 bdrms would suit us well. I just don’t know if I like the overall property size(5000sqft), I am big backyard kinda person. Thanx for your input.

Well the square footage counts, as that was permitted. However, an appraiser can’t count the 3 bedrooms - I really don’t know how they would handle that, if they would just say one bedroom, or discount the whole thing. You would need to call one and ask that. Sounds like you could just make that one big room again.

Thanx so far for your input. Permit was finalized. The lady at the assessors was like why do you want to know about what you could do with the rooms?(the ones not permitted) I just told her that my friend had a house with a similiar situation & when she went to sell, she was required to knock down anything that wasn’t permitted before she could sell.

I will call an appraiser & ask about the room situation.

Since the house has been empty for so long, how do I check the plumbing, electricity & those kinds of items? Or is that something you can put a contigency on? The ad does say as-is, does that include not being able to check & knowing if the plumbing & electricity basically work? Also, what other kind of contigencies can I use as a safety on this? Or is “and/or assign” good enough?

If everything checks out o.k., how would I go about making a ridiculous offer if I wanted to wholesale it? Because the least it needs is carpet,paint & some lawn clean-up, who would cover that?Would I add this to what I am going to sell it to the buyer for? Also, I’ve read here that I don’t need any money up front for a wholesale deal, but how am I to do this? I know the guy that showed me the property kept asking me about getting qualified with a lender. Well, if I want to wholesale it, I don’t need a lender, right? :help
I really want to move on this house if everything comes back okey dokey.

Heck! Lorik or tatertot ,can you just come do this deal for me!!LOL Just kidding!!!
It just seems like I am slow, I swear.:redface
Thank you again sooo much for everything, you are really helping me with your input.

Couple things here - good luck getting the utilities turned on for the inspection. Banks are really unlikely to do this, although you can ask. They may let you have the utilities turned on, but they would have to be put in your name. So, do you want to do this? I would make an offer based on the assumption that all of those systems need work. That way you are covered.
Also - unlikely that you will be able to assign your contract. You will need to do a double close. Ask the listing realtor if there is any stipulation from the bank about how long you need to hold the property. I did one where the bank required a 90 day holding period before I could resell (worked out fine since the rehab took 3 months). You must know this if you are planning on wholesaling.

If everything checks out o.k., how would I go about making a ridiculous offer if I wanted to wholesale it? Because the least it needs is carpet,paint & some lawn clean-up, who would cover that?
When you wholesale it, you sell it either to an end buyer, or someone who will rehab it. Your price to the end buyer should reflect the work that needs to be done. You are just taking a fee for finding the deal.
Also, I've read here that I don't need any money up front for a wholesale deal, but how am I to do this? I know the guy that showed me the property kept asking me about getting qualified with a lender. Well, if I want to wholesale it, I don't need a lender, right? :
If you are buying an REO, you will need proof of funds, and then do a double close. You should at least get a prequal letter, or the bank will not even look at your offer.