Foreclosure in 07042>Question Details

Linda Tidwell, Home Buyer in Mount Juliet, TN

Looking to put a bid on a luxury home that was forclosed after 15 months on the market. The bank has owned

Asked by Linda Tidwell, Mount Juliet, TN Thu May 28, 2009

it for 3 months now and ours will be the first bid. there is a glut of luxury homes in our area and so we are going in with a lower figure. We have cash in hand, not asking for anything. Whatelse would make the deal look sweeter to the bank.

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Linda: Paying more for the property! The bank has had a good evaluation of the local market from their agent. (Although I've seen some agents get too optimistic.) I'd advise getting a Competitive Market Analysis from a Realtor and a home Inspection BEFORE you go further. While home inspections can and usually are done after contract, with an escape clause, in the case of bank owned property, they cannot disclose any problems because no one at the bank has experienced any. If the home is in the "luxury" category and you can come up with the cash, it would be "Due Diligence" on your part to be sure that what you think you see is going to turn out to be what you get.

Yes, home inspections can miss things too. Nevertheless, brand new homes have sometimes been found to have thousands of dollars in problems and you want to be sure that your good deal is really all that good. If the house is exactly what you want, you should have your own advice in hand as to the value it carries in today's market.

You can really only expect to save the difference between what a speculator-investor would pay and what you are willing to pay. An investor will be looking for a profit. You can earn that profit by taking on the risk and any fix up costs yourself. This is the business model that you are working with, as far as I can see.
1 vote Thank Flag Link Fri May 29, 2009
The answers provided provide good counsel. I would like to answer your question from a little different angle because I think you were asking how to make your offer more appealing without increasing the purchase price.

There are a couple of strategies that I have used with clients that help. They are not full proof and the other agents are right that the banks/investors are trying to minimize their loses and get the most that they can out of these assets. However, if the market is flooded with these type of properties and it is likely that you will not have any other offers come in to compete with you the the following may help:

1. Increase your earnest money that is held in anticipation of your completing the purchase. This does not increase the purchase price but it does show them that you are serious and that you have real assets that makes it more likely for you to be able to complete the transaction.
2. Eliminate contingencies: if you are confident in the property and feel that you know the potential liabilities then you can make the offer without it being contingent on financing, appraisal, or inspection (be careful that you are really willing to give up these contingencies)
3. Be willing to close on the property right away (time is money).

Todd Gubler
Prudential Utah Elite Real Estate
0 votes Thank Flag Link Fri Feb 11, 2011
You've got great advice. I just like to add a little in reference to the inspection, get it done if allowed, before placing your offer; many banks don't give you the opportunity to terminate your offer based on the outcome of the inspection with out loosing your earnest money.

Watch for your $$'s.
0 votes Thank Flag Link Fri May 29, 2009
Hi Linda, you have been well advised by William in his response. Good luck to you.

Jeannie Feenick
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0 votes Thank Flag Link Fri May 29, 2009
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