Great answer, Rachel!

Remember, foreclosure companies are businesses and they look at the business side of the deal. For example they are not going to be swayed by the fact that you have to be out of your apartment in 3 weeks or that you would be the best to take care of this home. They only look at their bottom line and what monies they are making from the transaction.

In waiting on a counter, be encouraged when it takes a few days. This usually means that the asset manager does not have permission to go lower that a certain dollar amount and is senting the offer to the bank for acceptance. It takes a bit longer but its worth it!

Good luck!! Let us know how it goes!

Q1. Yes it is a good sign that they counteroffered. With your going in at 91% of list, a $4,000 reduction as a first counter is significant and encouraging. I've seen asset companies counter at only $500 less than list and have also had them flat reject offers, so a counter at least opens the lines of communication.

Q2. If your agent hasn't heard something back in 3-4 days I would call them.

Q3. My experience as a member of my company's foreclosure team: 1) the closer to the list price that you offer the quicker a response you will get. 2) a first offer will never be accepted even if for full price - if nothing else the asset company will counter back with a change in terms, i.e. closing date, etc.

Q4. In answer to another reader's question... finance terms mean nothing to asset companies as all sales are as-is cash sales to them. The deciding factor is the bottom line that they will net once all expenses are deducted from the agreed-upon sale price, i.e. real estate commission, their closing costs, any other concessions they agree to pay such as some buyer closing costs. As an example - a $100M offer asking for no buyer concessions will 'win' over a $100M offer that asks for a warranty or 3% toward buyer closing costs.

Your factoring the original price only muddies the water for you. It has nothing to do with this negotiation and frankly the asset company couldn't care less. Before a foreclosure is listed they get in-depth reports on comps and current market value from various realtors, and that information and the amount still owed on the house is what they use to formulate their list price. Preserving the original property value is of no concern. Their only objective is to recover as much of the money lost to the default as possible by negotiating the resale of the property based on the above criteria and today's economic situation.

A final thought - I'm curious as to why you are digging in your heels at 93% of list price. If that is the maximum you are qualified for I do understand. If not, what data have you used to cause you to feel that price is the fair market value? If you have cold hard facts to substantiate your offer, by all means submit that to the asset company for their consideration. However, if winning "a deal" is most important, make sure that if it doesn't work out you are willing to walk away from a house that you obviously care about for a few thousand dollars difference.

Good luck with your negotiations!

Q3. You should use a Realtor that had done REO's in the past

Q4. Do banks always go for the highest bidder or do they look at other factors like credit score, down payment, etc.?