Foreclosure in Robbinsdale>Question Details

Jesica, Other/Just Looking in 55422

We want to put a REALLY low offer on a home that has been in foreclosure for 2 years what is too low?

Asked by Jesica, 55422 Thu May 7, 2009

The home was built in 1910, nice shape with minor repairs as far as we can see. It has been in foreclosure for 2 years with no offers at this time. It started at $215,000 and now $99,900. We are willing to offer $71,000 because of unknown pluming status, surrounded by rental properties, and Shakes on the outside which has Asbestos. We had an inspector reassure us the Asbestos is only an issue if we were to nock down a wall or the house and we don't plan to do that. I were also hoping that because we have the full amount in our account from the loan they would be willing to accept. Is $71,000 a good offer? Should we go higher or lower. We really want this home.

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Since none of us have seen the house or have full details of your situation it is hard to provide specific advise. I'll tell you that how long the bank has had it or what price it started at or how much money you have all have very little to do with what the bank will accept as an offer. If it is anywhere close to market value for its condition and amenities it should be getting multiple offers. If it hasn't then it is still high.

You will have a chance to inspect the plumbing during the inspection phase of your purchase and if it's bad you can try to negotiate with the bank or often walk away. Rentals depend on condition, type, number. Asbestos siding will never rot and is quite durable, but yes there are concerns about the dust if they are damaged or removed.

Putting in an offer costs nothing. Waiting longer risks a further price reduction by the seller and new interest from other parties. An offer for 30% lower than the asking price in my opinion has very little chance to be accepted but there are no rules when it comes to this.

Sitting around doing nothing doesn't help you... do something to get the ball rolling.
3 votes Thank Flag Link Thu May 7, 2009
Since it is bank owned, the seller will not take it personally. If you can offer them a cash transaction, close in less than 30 days I guarantee you they will "hear' your offer. If they don't accept it, they will counter aggressively and that may be the best you will get. The home has already been discounted to reflect the condition and issues in the property.
2 votes Thank Flag Link Fri May 8, 2009
Offer then what you want to pay. If they want to sell the property, they will either accept the offer or counter offer.

If they don't counter offer in 2 weeks, offer $5000 more, and hopefully they will either accept or counter.

Keep going as long as your comfortable with what you are offering.

There are lots of fish in the ocean. Don't fall in love with the house as it just makes you offer more than you should.

Good Luck
2 votes Thank Flag Link Fri May 8, 2009
Hi Jessica, the first thing I would recommend is to find a Realtor to represent you (not the listing agent) that has experience in working with Foreclosures. These types of homes can be very tricky to work with and working with someone that has that specific experience is very important. Based on your question I wonder a few thing such as who is the seller of the house? This is important because your offer and the process can be very different depending on who is selling it. The offer involves many things other than the price such as the earnest money, closing date, personal property, inspection time period, etc. A bank is much more rigid in their terms so these other things need to be taken into consideration. Another thing I wonder about is your loan. Most banks won't lend money on a house if the plumbing isn't functioning or otherwise in poor condition. Another thing to consider is what the City of Robbinsdale will require you to do to the house before it can be occupied. You can always offer a lower amount then the asking price but I would want to make sure that you have the other answers before proceeding.
2 votes Thank Flag Link Thu May 7, 2009
The presence of asbestos in the building CAN hunt you at some point in the future creating a major expense. Either when you decide to sell or when eventually you have to tear parts or all of it down due to aging. I would definitely consult with an asbestos specialized lawyer to find out about the governmental regulations, both local and national, and then have an asbestos contractor give you at least some idea about the costs for various scenarios. It may still turn out to be a good deal but you don't want a big surprise down the line.
1 vote Thank Flag Link Fri May 8, 2009
Who cares what they are going to accept?Just make a very low offer that will justify the additional money you would have to put in to the house to fix it .Do not be intimidated by the bank the worse can happen is that will reject your offer.There so many houses available today that you can make an offer on a new one every day.
The house was reduced to 91,000 and there are no takers at that price.You want to offer 71,000.How much do you think will cost you to bring this house up to speed.What ever it costs you would be more than what you are offering which means there will be no buyers for a while to pay you for your investment.
From you writing you seem to be making the worse mistake a buyer can make-you are falling in love with the place-.Also why in the world do you want to buy a house that rounded by rentals?As a general rule the value of a house is decreasing when is in the proximity of rental property and the opposite is true My advise to you walk
1 vote Thank Flag Link Fri May 8, 2009
If you wait till all of the lights have turned green on this deal, you'll never get out of the gate. Figure worst case senarios for the repairs and add 20% and you'll usually be OK. The holder of this property could care less about your inspections, they want it moved for their own reasons and the quicker & cleaner yoiu can do this the more apt they are to accept a reduced offer. You would be better off making them a low offer with fewer stipulations and contingencies.
Good Luck
1 vote Thank Flag Link Fri May 8, 2009

You're in for some treasures!!! Is your offer in the form of cash? If it is cash I say go for it. If it is a conventional loan and if you find out that there are no offers since it's been on the market, they might take it or counter-offer. Make sure you get an agent to represent you. Do not work directly with the listing agent because their interest is with the bank not you - the buyer.

Cash is KING!

I will be happy to help you. My contact information is:

Nouk Haschka
Edina Realty
Cell - 612-616-7542
Office - 952-927-1156
0 votes Thank Flag Link Wed Oct 28, 2009
Hi Jesica,
If the home has truly not had any offers in two years then I would say put in the offer, they might counter, or just reject your offer. If they reject your offer, put in a higher one, your agent should be willing to do this. You should contact an agent who can represent you, don't contact the listing agent as they will only represent the bank, and ask them to find out for you if this house has had any offers and if so why have they not been accepted. Then if the answer has been no offers to date then go for it. You might be getting a home for the price you want. Be willing to buy as is with no expectation of them doing any repairs or concessions. Lot's of luck to you. If this home is in Ocean County NJ, I'll be happy to help you out. Contact me via email or phone me on my cell.
Coldwell Banker Riviera Realty
1055 Lacey Rd.
Forked River, NJ 08731
609-693-1500 x 140
609-384-177 cell
0 votes Thank Flag Link Fri Sep 4, 2009
8-10% Max. Otherwise the bank could wait and drop.
0 votes Thank Flag Link Fri Sep 4, 2009
Did you buy it? How was it?
0 votes Thank Flag Link Fri Aug 7, 2009
I would like to make a suggestion that I do not see on here. Get an unbiased set of eyes to look at the property. My first offer was on a 1920’s era house that needed a complete gut rehab. At that point, I did not have any idea what horrors I would face, so I spend $200 for a 203K FHA Consultant to do a walk through inspection. This was just a brief one hour walk through where he pointed out things that would have been complete nightmares like knob and tube wiring, illegal fire place, and what we thought was a newer furnace being 15 years old. The deal really never made it past the opening offer, but it was money well spent.

Also, when you make your offer to the bank, give them a run down of what needs repaired in the house to get it up and running again. I can’t guarantee it will help your cause, but it will show your high level of interest in the property as well as your knowledge about why you place a value under market on their property.

And as advised, work with a good buyer’s realtor, when the deal finally goes through, I’m sure I will say my realtor’s commission will be the best money I spent (or didn’t spend depending on how one views where the commissions comes from). Either way he certainly earned every penny of it.

I love the older homes too,
Good Luck,

0 votes Thank Flag Link Wed Jun 3, 2009
If you really want the house, I would suggest offering close to the reduced sales price of $99,900. An offer of $71,000 is likely to be rejected by the bank, since they're losing almost 67% of the loan amount (assuming that it's close to $215K). For the age of the home, repairs are a necessity. If you can do some of the work yourself, you'll save money on the repairs. Good luck!
0 votes Thank Flag Link Wed Jun 3, 2009
First never want for anything to the point your better judgment is impaired. Legions of people who have allowed this to happen are now living in poverty because they thought that real estate only appreciated. Boy were they wrong.

Anyhow, make your offer that you would feel good paying. You must have no resentments at all because home prices will continue to fall. You must get a great deal at the front end purchase price to reduce the risk of substantially overpaying for property.

Offer $50,000 and come up to $71,000 but only after and if they earn the extra $25,000 via concessions and expert negotiating skills.
0 votes Thank Flag Link Thu May 28, 2009

Since you really want the home go for it. Just make sure you have the ability to do all the repairs and prepare for a some unexpected expenses. A cash offer with a quick closing is a definite plus.

Good Luck!

0 votes Thank Flag Link Sat May 9, 2009
I am a licensed real estate agent in NJ and had a bank owned home listed, the buyer came in with a very low offer which I submitted, the bank countered and this went back and forth a couple more times. The buyer ended coming up to almost full price for this home, which by the way needed a lot of work. Once the contracts were signed the buyer did not have an option to get out of the contract for anything other than not being able to obtain a mortgage.
Being the price was set at market value, the bank would not accept lower than that, they do not have to. My suggestion is, this house has dropped considerably already and if you really want the house, put in your offer, but be willing to come up to their counter, if they give one, or at least close to the counter. Be prepared to purchase as is, so do home inspections before your offer if possible and lots of luck
0 votes Thank Flag Link Sat May 9, 2009
As a Realtor who's dealt with a few foreclosures - I think most of your answer is in your last line "we really want this house". I'd suggest making your offer at the $71,000 - BUT - be prepared to go the bank's asking price - IF you turlly want this house. Talk to your local lender and be certain you can qualify for an additional $30, meet the asking price of $99,000 or $95,000.

Now - what about the cost of bringing the house back in good shape. You mentioned plumbing and there's possibly a few other things you'll want to do. Are you prepared for those expenditures?

It can be surprising what some of the bank will accept - so try your offer of $71,000. There's only two things that can happen. They can say NO and you have to make another decision as to whether or not you up your offer . . . . or they can say YES - and you'll move forward from there. In shoret - GO FOR IT.
0 votes Thank Flag Link Sat May 9, 2009
Are you working with a realtor or are you on your own? If you are working with a Realtor that you know and trust, i'd say ask him since he should know better than all of us since he has access to the property and can better assess it. If you are not working with a Realtor, I'd suggest you find someone you can trust and then follow his/her advice.
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0 votes Thank Flag Link Fri May 8, 2009
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