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How far below Value are Foreclosures selling for in Ann Arbor Michigan?

We are looking at purchasing a home this month. We have found one we like and I just found out today that the bank foreclosed on it for 75k and they have it listed for 229k. The area is a good area and in a strong market they may get it, but that's not the case. There is work that needs to be done, it's not in turn key condition by any means. The layout is a little weird, the carpet needs replacing, the fireplace needs restoring, the outside needs some serious paint, there's not even a mailbox or house numbers! No appliances or even shower heads in the bathrooms. It's a 2200sqft home with air and heat, 4bdrm, 2ba. How low of an offer would anyone suggest we throw out there? I had an idea until I learned the bank didn't have to pay hardly anything to get it back. The house was originally priced at 299k. Most comps in the area are pricing in that price range but they are in good shape. The house is totally liveable the way it is, after you add appliances, it just needs "some TLC" as you realtors would say. But, I can buy a house the same sqft with a smaller lot for 180k and it has updated appliances in the kitchen, updated baths and is total turnkey condition. Does it sound right to pay the same amount for a house that is not in turnkey condition but on a 2 acre lot instead of a .25 acre? (yes in the same school district, and both houses have been on the market for the same amount of time) Also this home we want doesn't have high efficency anything. I was thinking 175k w/ 7800 towards closing, but I'm wondering if that's too high to start?

Public Comments

1. I have clients in Michigan that are buying homes for about half. Offer 100K and let them counter offer. I hear they have been stripping those homes clean once people move out. Make sure you have somone do a comp on the area. Also consider a rehab loan. Email me with questions if you want
2. Rachelle, Please don't believe the hype. Yes there are a few homes selling for half what the last lender approved for a mortgage PLUS legal and other fees. If the home was really foreclosed at 75K there would have been a hundred investors bidding at the sheriff auction. Most likely there was an error in public records. Were you looking on http://ewashtenaw.com that may have additional information. The bank will not compensate you for the weird layout and most of the other items mentioned were cosmetic. I suggest having your Buyers Agent run comparable sales of the neighborhood specifically for homes in the past 3 months. This would provide you with corroborating proof that the value of the home was less than asking price. They will also be submitting a BPO with the offer as further proof. If your offer, has the additional proof, they may consider your offer. Having to ask for funds, is definitely a negative and that offer may be tossed. The bank already knows they are loosing money. If you do not have good representation ( a Buyers agent experienced in foreclosures) I can recommend a few to choose from.