Many buyers have heard that Seattle real estate is more affordable than ever. Yes, prices have dropped quite substantially but when I hear people saying or I read articles about “Houses for Pennies on the Dollar” I get a little perturbed.
We have had a few people contact us with unrealistic expectations about what they can buy. We have had buyers asking us to find them large, updated homes with water views in nice neighborhoods like Greenlake, Richmond Beach, Queen Anne, etc. under $200,000. You’d be hard pressed to find a tiny tear down for that price in these neighborhoods.
Don’t get me wrong, there are bargains to be had but one must be realistic. Foreclosures and Short Sales can be a good value but they often require work and patience.
Buyers want to look at bank foreclosures, but they don’t want to do any work if it needs repair. They expect all homes should sell at the bank foreclosure prices regardless of whether they need work or not.
The homes that need a lot of work are the ones that sell for bargain prices. So, if you want a steal be prepared to have to do some work.
Many buyers feel the foreclosures set the prices in the neighborhood even though they may be missing a bathroom, have a structural issue and need tens of thousands of dollars in updates. Buyers are quite often dissatisfied with the condition of the distressed properties, but they don’t want to look at a regular home that is all fixed up because it is not a perceived bargain (when they can be).
You could take two similar homes next door to each other, one being a foreclosure and needing $35,000 in repairs and another being a normal sale and in excellent condition. The bank foreclosure might be priced $35,000 below the normal home, but when the buyer sees it they’re turned off. But then they’re also turned off by the price of the normal home because they feel it should be priced the same as the foreclosure fixer.
In short, there are bargains but be realistic. Either buy an updated home in good condition and get a fair price or get a fabulous bargain for a home that needs a lot of help and needs to be nursed back to health. Buying at a 20-30% discount compared to just a few years ago is a great deal and realistic. Homes for pennies to the dollar? Not in Seattle.
There are some great loan programs available for buying distressed and foreclosed homes that need repairs, such as the 203k FHA rehab loans & conventional construction loans.
For more information on these loan programs contact Michele Catoire at the Legacy Group in Bellevue, WA by email at firstname.lastname@example.org or by phone at (425) 818-5885.
Happy bargain hunting!
Kerstin G. Brooks
Brooks & Heinze Team
Skyline Properties, Inc.