Foreclosure in 97015>Question Details

Absolutely C…, Home Buyer in 97015

Should we bid higher or lower than our original bid after the winning buyer's deal fell through?

Asked by Absolutely Clueless, 97015 Sat Nov 27, 2010

We offered 240k on a foreclosure listed for 240k. We really wanted the house but unfortunately, we were informed that they chose another buyer. Two days later, on a reliable real estate website, the listing's status had hanged to "Sold for 270k." We were just informed yesterday that the deal fell through and that the house is now listed for 10k cheaper. To ensure we get this house, should we bid the asking price, keep our original bid of 240k, or raise our bid to 250k?

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Leigh Johnson’s answer
Your question raises a few questions in my mind. First, the negotiated selling price of a property is confidential until it closes. Are you sure of the reliability of the website that informed you of a selling price of $270k? Secondly, did you make your offer through a Realtor? If so, I am assuming the Realtor did a comparative market analysis on the home, showing you what the home would be worth if it was in pristine condition. Next, I would have an accurate dollar amount as to how much money you will have to put into the home to bring it up to that pristine condition. In that light, does it make sense for you to offer 250k, in that the home would still be such a great deal? Thirdly, I would try to find out why the home was brought down 10k. Did the previous deal fall through because of a discovered material fact regarding the house? You or your Realtor should contact the bank or the banks agent and get this answered. Once you have all these answers you can make an informed decision as to what the home is worth to you.
1 vote Thank Flag Link Sat Nov 27, 2010
With so many factors involved, it's really hard to say. I always tell my buyers to write as high as they can stomach if they really want the house. Also, are you utilizing financing? The great thing about the bank you're borrowing from is that they will send an appraiser out to make sure your property will pencil out as collateral for your loan. If the property isn't worth what you've offered on it, they will let you know, and you potentially have some negotiating power to lower your purchase price down to the appraisal price. Good luck!
1 vote Thank Flag Link Mon Nov 29, 2010
So many unanswered questions... Why did it fall through? Due to a poor inspection, to low appraisal, or did the buyers get some cold feet?

If you can find out these answers, then have your Agent perform a new CMA and make the offer based on those findings.

If it's 10K cheaper, that great news! I wish you the best, and I hope you get it this time. It's such a great time for buyers to snap up such great deals.

Kimberly Kinville
East Metro Specialist
0 votes Thank Flag Link Mon Nov 29, 2010
I would like to add a comment but not sure if it applies as since you do not discuss the timeframe. Did the sale fall through because the appraisal was too low. Have your agent do a market analysis of the home. So the asking price is now 230K? Find out if there are mulitple offers again.

You could have been seeing that it sold for 270 to previous owner or in the past. As stated before the price is not displayed until the property closes.
0 votes Thank Flag Link Sat Nov 27, 2010
Bid higher and peg it to an appraisal. Oftentimes you get lucky and then the appraisal comes in lower as they are nowadays. Then you sometimes get a $20,000 reduction.
0 votes Thank Flag Link Sat Nov 27, 2010

If this is the right home the best way to lose it is to decrease your offer amount......especially if there is other interest in the property.

A word of caution.....the fact that the deal fell through should also signal a "red flag" for you.... Why did it fall through? Was a problem identified when inspected? Our recommendation is to not run blindly into this situation but proceed with caution and see if the selling agent can fill in the blanks for you.....

Good luck,

0 votes Thank Flag Link Sat Nov 27, 2010
Where you plan to be in 5 years is good to consider, but an equally important concern is where you could be, given a worst-case analysis. So many people fail to take into account when buying a home what unexpected mishaps could befall them, and what steps they should take right now to mitigate the impact of those mishaps if they should occur.

It may be extraordinarily hard in our current economy in Clackamas County to overcome a lost job, a huge medical bill or some other unforeseen circumstance if you pay above market price--or even at market price. One way to help protect yourself is to pay as little as you need to for a home.

BeachBrokerBill from Encinitas, Calif., provided some excellent insight. The best person to answer your question is your buyer's broker. If you don't have one, you should retain one.

If you already have a broker, and you trust his/her judgment and advice, that is where you should go. If you're not sure whether you trust his advice, then you should get a different broker. You also would be wise to consult people you know and trust who hold jobs like that of a CPA, a real estate attorney, a mortgage broker, etc.

Best Wishes!
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0 votes Thank Flag Link Sat Nov 27, 2010
"To ensure we get the house" ensures that you will likely overpay.

With that said, it may not matter and Oggi's insights could be a good strategy. Before I'd pull that trigger, I would talk to your agent. I can say that folks I have seen in a similar situations lost the romance quickly once they got the house and are now even further upside down in this market than they would have been if they had exercised some patience.

Why didn't they call you as a backup when the first deal fell through? Your questions are for a good agent in your area to answer based on the specific situation. It really cannot be answered legitimately in a forum here, despite the good suggestions and insights provided thusfar.

Do you have an agent? Are your loan qualifications solid? If you can't demonstrate that you are truly qualified to close, the price you offer really doesn't matter because you will not get the house. You call yourself absolutely clueless - take some time to talk to local professionals and change that self image.

0 votes Thank Flag Link Sat Nov 27, 2010
I think you need to speak with your agent to find out what the truth is. Websites = as much as we try, are not always current or correct. Your agent can speak with the listing agent to find out where the property stands and advise you on ohw to make your offer. I hope you gget the home you want! Have a great holiday season!
0 votes Thank Flag Link Sat Nov 27, 2010
Leigh Johnson's answer is good, and let me add some thoughts. Price may not have been the primary issue with the previous buyer's bid being rejected (or accepted in the first place). Lenders like simple clean offers. "All cash, as is, no inspections" is the lender's idea of a perfect offer, and they will accept a lower price on that basis than from someone whose offer is contingent on inspections, getting a loan, etc.

As for what to do now, the question is, "Do you want this home badly enough to pay more than fair market value?" Also, "Are you willing to do (or pay for) whatever improvements are needed to bring the home up to current standards?" If the answer to those is yes, then raise your initial offer. If the answer is no, then reaffirm your previous offer.

In either case, be guided by your Realtor and their statistics with what comparable homes have sold for.

As Leigh Johnson said, fair market value is not necessarily the offer price.
0 votes Thank Flag Link Sat Nov 27, 2010
The best advice I can offer is general. If you love the home and you "really want" it and you plan to keep it for at least five years, then bid more based on the value it offer to you and your family rather than what the current market may reflect.

Good luck.
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0 votes Thank Flag Link Sat Nov 27, 2010
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