A Little About Buying a Foreclosed Home in Olympia
It’s a great time to purchase foreclosures and other investment properties in the Olympia Wasington area…Get ‘em while their hot!
While the foreclosed home market in Olympia and Western Washington is not like some other parts of the country (Dade County, FL had over 14,000 foreclosures in the past year, and Vegas was similar), local bank owned properties do offer some great deals.
If you are interested in buying a foreclosed property, either as an investment (rental) property, or as an owner occupant, it is essential that you understand the characteristics of the market. Our market is unique in that we are the State Capital, we have JBLM just up the road (expected to be the home to over 40,000 soldiers and airmen in the near future), and it seems that a large portion of the population of the south western United States is relocating to WA.
In light of the strong demand for housing, and specifically foreclosed housing, in Olympia, it stands to reason that the deals that can be had in other parts of the country are not happening here. There are cheap homes available (and lots of junk), but purchasing a home for 50% of value is not realistic…although there are lots of folks who think it is.
The process for pricing foreclosures by the banks is to have 4-6 realtors visit the home and do what is called a “Broker Price Opinion” or BPO. The BPO is the realtors best estimate of what the home will sell for based on what comparable homes in the area are selling for. The lender then prices the home based on the BPO’s, with a 2-3% discount in hopes of a quick sale. As you can see, there is a system that the banks must follow in accordance with their internal rules, and shareholder mandates.
The offer and purchase process for a foreclosure is very similar to a traditional sale, with the exception that you are not dealing with the emotional attachments, or the financial needs of the seller. An offer to purchase is made, the bank will negotiate, and inspections, appraisals and all of the other normal tasks are still part of the process.