Zillow uses public information from the county websites to determine value. They do not take into consideration many things that appraisers and realtors do. Zestimates should come with a disclosure that reads: "For entertainment purposes only".Don't worry about contesting it. It's pretty much know that these values are incorrect. Anybody with a need to know will get an appraisel or comps from their real estate agent.
HUD homes have already had an FHA appraisal completed before the homes have ever hit the market, which is how they came up with the listing price to begin with, so something tells me your realtors "soft appraisal" is off.HUD is not in the business of overpricing homes. In fact they are usually priced well below market value because they are sold "as-is". The fact that your realtor says it is priced 25k above market value concerns me. HUD wants to sell their homes quickly and inexpensively to maintain neighborhood property values and promote home ownership so I would not see why they would overprice a home by that much or at all.If the home has been on the market more than a month HUD will typically accept a bid around 10% less than the asking price in my experience. I'm not sure if your bid falls in that range, but maybe you could have another realtor run comps to see what price they come up with.If it is in fact overpriced then you need to have the business sense to walk away from this bad deal, no matter how much you might love it.
Seems like you are going to be putting all your eggs into one basket by buying this foreclosure with all (or most) of your reserve funds. I wouldn't do this personally. I would leverage my investment by getting a mortgage. You could always pay down a huge chunk of the principle after the fact. Also, if you did get a mortgage then you could use your savings for fixing the place up. Or like Joseph said get a FHA 203(k) loan and roll the repairs into the loan.You have a lot of options. Talk with a lender and pick the option that suits you best.Good luck.
I would never use that website. I've heard one too many horror stories. There are plenty of safer ways to find good deals on foreclosures. Start by calling a local agent that works with investors.
Congrats on paying off your student loans. It sounds like you are a solid candidate financially and should not have a problem qualifying for a loan. 5% is usually the minimum for conventional loans, so if you have that along with good credit I don't see the need to go FHA. Plus, like Seth said some sellers prefer buyers with conventional financing. Don't forget about the closing costs though. They typically run about 3-4% of the purchase price. It's not uncommon to have seller's pay them, but in the seller's market that most of the country is in right now it will be difficult to get that concession from sellers.
Looks like you have served long enough to qualify for a VA loan so congrats and thank you for your service.The minimum credit score to qualify for a VA loan is usually 620 so if you are in the mid 600s you should be fine.To qualify for a better rate you will want to bump up your credit score though before applying for a loan. Here are a few easy things you can do:1. Get a free credit report from the 3 major credit bureaus from annualcreditreport.com and check for any negative marks. If you have late payments for example you can call the bank and ask them to remove it as a courtesy. If they won't ask them for a pay-for-delete and pay it off if you can afford it.2. Call your CC company and have them increase your credit limit. This will lower your credit utilization ratio and increase your score.3. Transfer balances from cards with over 40% of the credit limit utilized to ones that have low balances.Some of these will cost a little bit of money but it pails in comparison to what you will save in interest over the life of a loan. For example, the difference on a 0 down, $200K, 30 year loan at 4% and 5% is over $40K in extra interest paid over the life of the loan!If you do not have any credit established then talk to your bank about opening a secured credit card. It will require a deposit but most banks give them back after 6 months to a year of on time payments. Also, ask your parents to add you as a signer on one of their credit cards (as long as they have good credit of course).Hope that helps!
Property value guesstimates. I've seen these "zestimates" off by up to 40% so pay no attention to them. They are for entertainment purposes only as far as I am concerned.
Matt is correct. USDA loans are 0% down for homes in rural areas and would be a good option. Closing costs would have to be another concern for you I would imagine. You can ask that the seller pay them, but if your market is like most right now - a seller's market - then you probably won't have any luck.Closing costs generally run about 3-4% of the purchase price. If you don't want to pay that much I would suggest going with a HUD home. HUD will pay up to 3% of the purchase price towards your closing costs, plus pay for the escrow fee and termite inspection, leaving you with little to no money out of pocket.Hope that helps.
Put your home on the market asap. If your market is anything like AZ's, which is a seller's market, then you probably won't have any luck getting an offer accepted with the contingency of getting your home sold. It's just not going to happen.And yes, use one agent to make things so smoother.
HUDhomestore.com - The official HUD listing site.When you find a property you like go to the addendums tab and click on Property Condition Report. This is like a mini home inspection report and tells you what was found wrong with the home. This can help you weed out the lemons if that is what you are trying to avoid or give you a good idea of how much you need to spend to get the place up to par. You should still get a home inspection done after you purchase the property.Hank is absolutely right about selecting an agent. Not all agents know how HUD homes work. In my office I know of several top producing agents that don't fully understand the process. To be sure you are dealing with a real estate agent that knows HUD homes ask them these simple questions before deciding to work with them (not a guarantee they will be awesome but a good start): 1. Are you a HUD registered agent? (agents have to be registered with HUD to submit bids for clients)2. What are the earnest money deposit amounts? (In AZ it's $500 and $1,000. $500 if the purchase price is $50K or less and $1,000 if over $50K)3. What does the listing code IE stand for? (Insurable with Escrow)Hope that helps.Happy House Hunting!