ᐅ Buying a House at a Foreclosure Auction – What Is a Realistic Price?
Created on: 10 Jan 2020 08:07
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Maddy86
Good morning,
We are considering buying a house built in 1960. The current owner purchased it two years ago through a foreclosure auction. The market value at that time was stated as 75,000, but he won the auction for 100,000. Afterwards, he apparently paid off a mortgage of 45,000 that was still registered on the property.
If he were to sell it now, he would have to receive around 200,000 because of the taxes he would have to pay (due to the mortgage). After six years, this would likely no longer apply.
Is this all correct? Unfortunately, we have no experience with this! Are there other options? The amount of 200,000 would exceed our budget and seems quite high to us.
Best regards, Martin
We are considering buying a house built in 1960. The current owner purchased it two years ago through a foreclosure auction. The market value at that time was stated as 75,000, but he won the auction for 100,000. Afterwards, he apparently paid off a mortgage of 45,000 that was still registered on the property.
If he were to sell it now, he would have to receive around 200,000 because of the taxes he would have to pay (due to the mortgage). After six years, this would likely no longer apply.
Is this all correct? Unfortunately, we have no experience with this! Are there other options? The amount of 200,000 would exceed our budget and seems quite high to us.
Best regards, Martin
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Burner61010 Jan 2020 12:19In our area, the standard land value is around 24€ per square meter (approximately 2.23 USD per square foot), so it's already quite low, but still very nice.
We could also build and would pay about 20,000€ (around 22,500 USD) for the plot.
The 200,000€ (about 225,000 USD) mark has been a limit for a used property of this age here. You also have to consider the age. That we can afford this is not something we need to discuss here, so no worries about that.
We could also build and would pay about 20,000€ (around 22,500 USD) for the plot.
The 200,000€ (about 225,000 USD) mark has been a limit for a used property of this age here. You also have to consider the age. That we can afford this is not something we need to discuss here, so no worries about that.
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HilfeHilfe10 Jan 2020 12:20Market value 75k and bought for 100k. Two years later, you want to buy it for 200k. Hello?? Are you serious?
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nordanney10 Jan 2020 12:24Burner610 schrieb:
The 200K mark has been a limit for us when it comes to a used property of this age. You also have to consider the age. The age of a property basically doesn’t matter. In this case, you would have a property with a modern standard (wiring and roof are new).
Burner610 schrieb:
We could also build and would pay 20K for the land.. But then 180K is not enough for a house.
You want to have it both ways, but that won’t work.
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Burner61010 Jan 2020 12:31For a new build, our budget would of course be higher and also available. We just don’t want to pay too much for a house that is quite a bit older. Sure, I could pay $250,000 for it, but then I might as well spend a bit more and build something.
Our budget of $200,000 was actually the limit for this used property, not what we are capable of. Sorry if that was misunderstood.
I don’t know why the market value was so low. Given the condition of the house and the size of the lot, the value is definitely higher than the $75,000 mentioned.
Our budget of $200,000 was actually the limit for this used property, not what we are capable of. Sorry if that was misunderstood.
I don’t know why the market value was so low. Given the condition of the house and the size of the lot, the value is definitely higher than the $75,000 mentioned.
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Burner61010 Jan 2020 12:41Burner610 schrieb:
The house was rented out in the meantime.That's not correct; it was apparently vacant. That would change the situation, wouldn't it? At least regarding his taxes...
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boxandroof10 Jan 2020 12:50Burner610 schrieb:
It’s unfortunate if the house has to be bought at a much higher price than the current market value because of this tax burden, which he naturally wants to have paid.Does he actually want or need to sell now or not?If yes: any potential taxes are his problem alone.
If no: then he apparently wants to be forced into a sum that is above the current market value.
In both cases, you’ll have to decide what the whole thing is worth to you.
Maybe something like rent-to-own could also be an option.