Foreclosure in Oak Creek>Question Details

OC-homebuyer, Home Buyer in Milwaukee, WI

Is it a good idea to offer MORE than asking price?

Asked by OC-homebuyer, Milwaukee, WI Wed Jan 14, 2009

If we find a foreclosure (REO) that we LOVE, and the asking price is quite reasonable, is it advisable to offer more than the asking price, to ensure our offer is accepted?

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OC -homebuyer-
The answer to that is "it depends". I assume your Realtor is providing you with some guidance and you are aware of comparable neighborhood property prices. As long as you have a clear idea of what you may need to fix on the property and it is truly the house you want- there is nothing wrong with going in with a Strong offer.
Make sure you have your written pre-approval to submit with the offer also.

I always advise my Buyers to put in their highest and best offer- especially when you may be competing with other Buyers (which is happening in many cases here in the Milwaukee area right now).
Interest rates are incredibly low, so hopefully you will have a win-win on your purchase.

All the Best to You!!
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1 vote Thank Flag Link Wed Jan 14, 2009

On the surface there is nothing wrong with doing this to improve your position as a potential buyer. It is a common tactic, especially when there is multiple buyer interest in the home.

Keep in mind.....if this is a highly desirable home, other buyers may be considering the same strategy.
0 votes Thank Flag Link Fri Jan 16, 2009
YES, if my home buyers like the property, has equity, it will get the attention of lender asap more than likely you should receive immediate response, winning bid. Based on property I suggest my buyers go approx. $500 to $1000 over list price however each property stands alone when submitting an offer
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0 votes Thank Flag Link Wed Jan 14, 2009
There are so many facets to the sale of a foreclosed home that you might not often experience with a traditional sale. One of them in our area which is becoming more prevalent is that the bank is initially unpricing the home in comparison to comparable properties to draw in buyers in an effort to receive multiple bids. Because of the oversupply of inventory, this positioning of the home makes it stand out from the competition and usually produces more showings and hopefully more offers. Often times the bank will not respond in the time frame that the buyer had hoped. Instead they sit back and accumulate as many offers as possible and then choose the one that best fits their needs. Many times you'll then get that call asking, "Is this your highest and best offer?" You may or may not be competing with other offers at that time.

If you are working with a buyer's agent and they can produce, to the best of their ability, a value for that property based on comparables, that may help you set the mark for your offer. In the end you need to feel comfortable that you've done the best you could with your price should you lose out on the property. Keep in mind that an attractive offer to the bank is not only about the price. The terms are equally important. In most cases with a foreclosure, an offer will not be accepted that has a sale of home contingency. The buyer should always have a pre-approval letter ready to submit with the offer. This shows the strength and readiness of the buyer and the willingness of the lender to lend on the property. Closing as soon a possible is always a bonus to the seller (bank) as well. Keep the offer free from any contingencies that are not really imperative to you. You basically want the cleanest offer with the most attractive terms for the seller which are also acceptable to you.

Best wishes to you in your new home!
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0 votes Thank Flag Link Wed Jan 14, 2009
I would agree with Karen that it depends on the situation. The first thing , is to make sure you have a buyers agent to guide you through the process. That agent should assist you in establishing the value of the property ,so you feel comfortable with the offer. Before making the offer get pre approved so lender understands you are a good buyer. In this market you can have one reo were there is no one competing with you for a deal and another case where there are 6 people competing for the same property.

Good luck
0 votes Thank Flag Link Wed Jan 14, 2009
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