Houses 4 and 5

Made two offers today:

The first was to a condo in the same development as House 3. This condo was not a foreclosure, but it is in the preforeclosure stage. The auction is set for April and the MLS listing says time is of the essence. I did some research and based on the monthly amount and starting loan amount, I reverse engineered the interest rate, then ran an amortization schedule to figure out about what she owes now. (The loan was obtained in 1999.) Faxed the offer today, which was $15K below the asking price. The agent called and said she didn't have the payoff amount yet from the bank and she'd get back to me. She asked how I came up with such a low figure. Rather than tell her I made a rough guess at what was owed, I said it was the minimum I could pay that would allow the deal to be worth my while, given closing costs, rehab costs, etc. I said I'd waive an inspection (except the termite inspection), and reminded her this was an all-cash offer, and I was offering a short escrow. No lending approvals to worry about, short sale time. Those are pluses in this situation. I gave her until Friday to respond, which she thanked me for. She said most people want a response within a day.

House 5 was an apartment that is a VA foreclosure. I checked the place out at lunch today and it is in surprisingly good shape. I put in a bid below the asking price, but relatively higher than I would had it not been in such good shape - about 15% below. The asking price was close to FMV anyway. I had heard from the listing agent that bids had been received on this property but none had been accepted yet, which was another reason I stayed a bit high. I think the fixup costs will be relatively low.