I Want To Buy A Single Family Home in Gainesville / Haymarket For $250,000
I recently received this in an email from a prospective new client:
We are interested in a 3-4 bdr single family in Gainesville or Haymarket area for a sale price of $250,000. I realize that is low, but I'm sure there are some folks out there that will take that in this market. we are also interested in any foreclosures (that have not been gutted out) or properties that are available for auction. My wife and I have been looking for new construction as well, and ran into a few builders that were willing to negotiate prices. $250,000 may be a stretch for new construction, but I'm aiming to catch a bargain. We have a six month window for a purchase, so we have time to wait for the right property.
My response was:
Thank you for the email. I understand why you would be looking for a bargain – with all of the short sales, foreclosures and “educated sellers” putting properties on the market, it is a good time to shop wisely. While I have found that some of the builders are willing to negotiate, they are a lot more realistic about their costs than the banks who are selling foreclosures. In the good old days, before the run up in prices, builders were selling their homes on a cost per square foot basis and the combined cost of home, land and improvements averaged to around $100 per square foot or $250,000 for a 2500 sq. ft. four bedroom, 2 bath, 2 car garage home. Since then materials costs have gone up (a little), labor is about the same, fuel has gone up (a lot) and land prices have begun to drop back towards the pre-boom levels. If you can find a good buy for under $250,000 in a single family home, don’t waste any time doing so. While I think that what you are trying to do is possible, you may want to have a long talk with a lender that does the old fashioned 203K style FHA loans – they will allow you to purchase the home and will provide up to $35,000 in funds for improvements – paint, appliances, minor repairs, counter tops – that sort of thing. In my experience you will want to be wary of any homes that don’t offer photos of the interior – in many cases they have been gutted by the previous owner and can be very expensive to repair. All of the short sales and foreclosures are being sold “as is, where is” so plan on hiring a home inspector to make sure of the condition and a plumber to pressure test the pipes as most of the homes have had the power turned off and if the pipes did freeze, you could have a heck of a mess on your hands when the water gets turned on.
FYI. I just ran a similar search for a new client and there are 50+ properties for sale in the Bristow, Gainesville and Haymarket area priced under $250,000 and none of them were single family homes. Warrenton was just about the same, but the few single family homes were not very pretty and kind of old. And, in this market depending on the seller, expect to take from one to six weeks negotiating with the owner/bank, and then typically settlement takes place in three to six weeks – if you plan on the low key approach – occasionally on week ends, the search phase will be another 4 to 6 weeks so on the long side of time table if you started today it could be 16 weeks or 4 months until you were able to move in. OK?
If you would like some help with the search and negotiations, give me a call, I’d be happy to help.
Good luck with your home search.
My concern is that I be as open and honest as I can when answering questions from friends, clients and prospective new clients, so my question is: Was I clear? Did I answer the question or raise more questions?
Have a great day and thanks for reading.