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Nov 26, 2007 6:20 pm US/Pacific

Calif. Foreclosure Shoppers Get A Dose Of Reality

Reporting
Sue Kwon
OAKLAND (CBS 5) ― Anne Huang helped her parents buy a home in the desirable Rockridge neighborhood. The deal closed in a little over one week.

"We got a pretty good deal. It's under asking price," Huang said.
Her family bought it for $80,000 under the appraised price of $775,000. And what's more surprising? It was not a foreclosure or distress sale.

In Northern California, more than 600 bank-owned homes went on the auction block in the second week of November alone. But, when the deal is done realtor Richard Kim says, "Foreclosure sales are not what they are hyped up to be."
He should know. In recent months he has helped clients negotiate bank owned and traditional sales.

While a foreclosure may seem like a bargain - normally at 20% under market value - Richard says buyers need to consider the undisclosed fix-its.

"If they have a foundation or roof issue, they need to take on that responsibility to fix that. It could be hundreds of thousands of dollars. You are not going to get a mint condition home for 20% less than market value. It's not going to happen," said Kim.

So Richard says buyers shouldn't miss other bargains popping up in recent months on low to mid-range starter homes.

A number of recent sales in the popular Rockridge neighborhood were at asking price or below. In October, Bay Area home sales hit 10-year lows sliding 40%. But, motivated sellers are willing to negotiate with the limited number of buyers in the $500-$700-thousand dollar range especially those who qualify for jumbo loans like Huang.

"This one does need the work but we're willing to do it. It's a great investment for the family," she said.

(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)

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