Foreclosure in 95252>Question Details

Mrs. Smith, Home Buyer in Valley Springs, CA

HOW MUCH BELOW ASKING PRICE WILL A BANK ACCEPT ON A FORECLOSED HOME? WHAT'S A SAFE BET?

Asked by Mrs. Smith, Valley Springs, CA Mon May 12, 2008

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First, do a market analysis to see how that property compares with similar properties in that area. Second, take a look at the condition of the home. Ask yourself, "will it need extensive repairs or not?, Is it worth it?"

Remember banks or any other entity owning foreclosed propeties do not reject or accept offers soley based on the price offered. The financing terms, buyers ability, as well as closing date all factor in.

Never be afraid to make a justifed low offer 10, 30, or 40 percent below asking price. It is good to have sound reasoning for why you are offering such a price. Although no hard rules as to how low an offer a bank will accept exist, you can count on the bank doing their homework. Banks understand the market condition, and want to unload property hopefully with a good return.

The final point to remember is always understand your objective in a deal.
3 votes Thank Flag Link Tue May 13, 2008
Mrs. Smith,
You know a great deal when you see it, if not, you need to look at more homes.

The last REO I bought was 224,900. We offered 225,000
I was told another buyer offered more, however we were a stronger buyer, 10K earnest, 50% down, and that is the reason the bank choose us.
The home appraised on our end for 10% more. It was on the market a total of 9 days.

The trend for banks is to price them to sell, get them done. Create multiple offers. Of course do the comps for the neighborhood, check the resale and new construction.

Good day & Good Luck
1 vote Thank Flag Link Tue May 13, 2008
Mr.P, Other/Just Looking in Arizona
MVP'08
The best answer that I can give you is to do your research on the home, work with an agent that can do comparables for you...then make an offer that you feel comfortable with and that is still within a realistic realm. Although the banks take much longer to respond (in some cases), it has been my experience that they will counter back the same as home owners would. Currently homes are selling somewhere between 7-10% below the asking price on average. So hopefully that helps to give you a more concrete answer.
I would be happy to send you the current listings in the area if you'd like to email me privately and tell me your criteria.
Sincerely,
Nicole
1 vote Thank Flag Link Tue May 13, 2008
A safe bet for acceptance is a full price offer. On the other hand, if you have time, patience and an industrious agent, you may be able to fetch a bank-owned home for less than what is being asked.

It is most important, though, to do (or have your agent perform) solid research on comparables and market trends.
0 votes Thank Flag Link Tue May 13, 2008
I also suggest check for all damages and do not forget the underneath and attic. We previously found a forclosed property that my daughter and grandsons love! But knowing it sells as is we deceided to do as much inspecting as possible. We have found major termite damage but because of the size of the yard and location we have shown the realtor the obvious eye level termite damage and will still make a low--ball offer. We do some remodeling and small construction so for us it is do able. The home was also treated with barrier iinstalled. We will again have it treated if the bank takes our offer. So I am stating "condition of the home " should steer your offer...But beware of "AS IS"
Flag Tue Oct 9, 2012
Roberta Murp…, Real Estate Pro in San Diego, CA
MVP'08
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