Lake Forest prices now start at $95,000 for a one-bedroom bank-owned condo. It previously sold in 2005 for $260,000 using 100% financing (probably using a “liar loan” without any income documentation!) I seriously question the wisdom of anyone paying that much for a property this size, as you could have rented it for less than $1000/month at that time, instead of taking on a mortgage, taxes, and HOA dues which probably came to a total of close to $2000/month. This unit has been on the market now for 9 days so far, and I expect it will take a little while longer to find a buyer who wants it and can also afford it using today’s more traditional standards to qualifying for a loan.
The total number of bank-owned homes in Lake Forest today is 45, and they have an average price of $326,000 at $232/square foot.
Total active homes on the MLS in Lake Forest is currently 287, with only 97 of them available as traditional “non-distressed” sales with a seller who can answer an offer without having to wait for a bank to approve the price. Of those, there are 30 condos and 67 single family homes. Prices of the single family homes begin at $459,000 and go up to $1,695,000.
For buyers who are hoping to pick up a “deal” on a foreclosure property, it is critical to be fully pre-approved in advance and to be educated about the values. Many of the foreclosure listings are coming on the market priced very low compared to other properties. They may be in almost any condition, ranging from totally dirty and damaged to pretty nice “move-in” condition. Alert agents and buyers are finding them and making offers almost immediately. I have had several experiences where my buyer submitted an offer the first day on the market, then, after waiting for 3 or more days, the bank’s agent asked all the buyers to re-write their offers at their “highest and best” price. This strategy has created an “auction-fever” environment that leads to the home selling for substantially more than the original list price. If you plan to make an offer on one of these undervalued properties, you need to carefully review the comps, and make your best offer based on your perception of what it will really cost you to make the home comfortable for you!