It is a great time to buy, with many good deals. Getting a best buy in today's market is challenging. And the best deals go the fastest. Having your own Realtor is essential. Find a Realtor, in the area where you are buying, that you can work with well. Sign a buyer agency contract with that agent. Under this contract, the Realtor will be working for you and looking out for your best interests. Do your own research because knowledge is power. Then, trust your Realtor to help you get the best price on that house.
Will vary from bank to bank and the condition of the property, but generally a bank may consider an offer 10-15 percent below the listing price. If the property stays on the market for ususally 25-35 days (depends on seller) the price will be reduced by a certain percentage, then the cycle begins again until an acceptable offer is received.
Keller Williams Realty
Best of luck!
We're sorry to say there is no simple formula of percentage that will guarantee the results you are seeking. Our recommendation is to consider working with a local real estate professional that both knows the local market and understands foreclosure transactions.
If you are looking to spend in the $80,000 range but are looking in the $120,000 to $130,000 range, you may want to consider closing the gap a bit. By looking at a $40,000 to $50,000 price differential, you may be expecting the lender to make too much of a drop to be reasonable.
I hope these several lines will answer your question.
It's unwise to pay too much,but it's worse to pay too little.When you pay to much,you lose a little money, that is all.
When you pay too little you sometimes lose everything,because the thing you bought was incapable of doing the thing it was bought to do.
The common law of business balances prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder it is well to add something for the risk you run. And if you do that,you will have enough to pay for something better.
There is hardly anything in the world that someone can't make a little worse and sell a little cheaper-and you shouldn't consider the price alone.
Good luck and if you need further help please, feel free to contact me.I'm right here in Grand Rapids.
That said, you're looking for a general rule of thumb, so here goes:
Ive seen at least two main recent strategies with REOs.
(1) A bank will list a property in a high traffic or desirable area considerably below market value, in order to garner major attention and get multiple offers all at the same time. The strategy can drive up the price quickly and sell the home immediately. In those cases the winner will probably need to offer above list price with the least number of contingencies attached.
(2) The bank gets an appraisal, lists at a competitive price based on the market value, and drops the price incrementally (monthly usually) until it sells. In these cases, it is rare for a bank to accept an offer much below 90% of the current list price. So, if you have no competition, its probably good to figure out that 90% number, add on your closing costs, and consider if the resulting number is worth offering. If its too high, ask your Realtor for the list date or date of the most recent price drop, and check back in 3-4 weeks.
Pete Bruinsma, GRI
Associate Broker, Grand Rapids Realty
Anna is correct with telling you to discuss this with your buyers agent.......as she can show you what has sold. Whether it be a bank owned or regular sale. There are so many factors in putting in an offer, as you may enter in a multi offer situation or you may be the only bid. My client the other day offer over asking price and we still lost. Also, know banks will conduct either their own market evaluation, must times by doing a BPO ( brokers price opinion) so they will have some idea what the house is worth. If new to the market, it may not go for much less then asking price. I always tell my clients to put their best offer in, as if they loose the bid it is okay, because they would not spend any more for it anyway, and if they win the bid, they feel the home is worth it and/or good deal. I have seen many buyers worry that they are bidding too high only to loose to another bidder, then kick themselves they did not put more in. Good luck in your home purchase!
Statistics show that foreclosures sell for approx. 27% less than regular market value properties. Short sales are also in that same ball park. If you are looking at a $120K house you should put an offer around $87,600 but it really depends on more than that. It also depends how long the property has been on the market, what financing condition it is in, where it's located, etc. If you have a specific house or what a list of foreclosures, please call Dave @ 616-893-3287 and he can help you further.
Have a great day!
Good luck to you