Foreclosure in Romeo>Question Details

Duco, Home Buyer in Romeo, MI

is it common to pay more than the listing price on bank owned homes?

Asked by Duco, Romeo, MI Tue Aug 4, 2009

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In my market banks are consistently pricing homes below market value in order to generate multiple offer and start a bidding war.

The main thing to focus on is the homes actual value vs. the list price.

For example if a 4000 sqft ocean front home was listed at $2,000 dollars would you feel uncomfortable paying more than the list price. I doubt it, if you knew of the existence of multiple offers you would probably look at what recent comparable sales have gone for and base your offer on the homes actual value.
0 votes Thank Flag Link Thu Aug 6, 2009
Submit any offer buyers agent can render opinion in some instances YES. If home has equity works with short / long term goals. Many factors come into play prior submitting winning sales offer.


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0 votes Thank Flag Link Thu Aug 6, 2009
Duco as many have said oh yes right now it is very common at least in many areas of Macomb County. But it may be helpful if you understood Why.

Our team watches the market stats and what we are seeing is less listings which would account for the multiple offers forcing buyers to pay more. For instance last year at this time there were about 7000 homes for sale in Macomb now there are about 4500. Less homes but same about of buyers - means multiple offers and over bidding.

On top of that the banks are holding back on the foreclosures. In Jan about 20.9 % of the listings were foreclosures now they account for 9.6%. Since buyers like the foreclosure prices and there are less of them you will again see multiple offers and over bidding.

Hope this helps you - sometimes if you know the Why it is easier to make a decision.
0 votes Thank Flag Link Wed Aug 5, 2009
On a foreclosure you are likely to pay more than the listing price on the home.
0 votes Thank Flag Link Wed Aug 5, 2009

In short.......Yes, in some situations it is common for buyers to pay the bank's asking price and even more than the asking price.

Our recommendation is to consult a real estate professional for the information you will require to be able to make an offer that is an accurate reflection of the current local real estate market as well as one that will meet your personal needs.

Good luck
The Eckelr Team
0 votes Thank Flag Link Wed Aug 5, 2009
Hi Duco,
Just as Maureen said it is common with the banks pricing them far under value to generate a ton of interest in Metro Detroit. On Monday a HUD home in Macomb County had a high bidder of over 300% of list price we won't know for another 7 days how many offers came in on this property, but I know of at least three agents from my office alone that submitted an offer on it. Talk to your buyers agent and have them do a market analysis and make your offer according to what you want to pay for the particular property not just the list price. Good luck
0 votes Thank Flag Link Wed Aug 5, 2009
I have seen bank owned homes listed FAR under value recently. Yes, it is common. Banks are using a modified auction type of sales technique by setting the price low, creating lots of interest and taking lots of bids.

Worry about paying what the house is worth and not about what the asking price is. You can pay over asking and still be getting a VERY good deal. We helped a set of buyers this spring pay about 25% over asking on a house where there were 14 bids of the first day it came on the market. We narrowly beat competitors and got the house. The house would appraise at a much higher value than my clients paid. They got an outstanding deal even though they paid more than list.

Ask your buyer's agent what they house is worth and go from there.

Good luck!
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0 votes Thank Flag Link Wed Aug 5, 2009
Maureen Fran…, Real Estate Pro in Birmingham, MI
Good Morning,

In today's market, nothing is common or the same as it was yesterday...

When buying a home, your agent should furnish you with a complete market analysis showing like properties, what they have sold for within the area. Using this data will help you determine what offer you would like to present to the bank. Many of the properties in this area have been on the market for quite some time, they do require work. Depending on your financial situation you could put together an offer that would be higher than the listing price, with you receiving "seller's concessions" back at the table for repairs. Having the right information in hand will insure that you are not paying to much for the property.

Banks are in the business to make money, not sit on homes. If your offer has all the right ingredients, timing, credit scores, employment, down payment, they will consider anything.

Good Luck and take your time, here in North Macomb county we have plenty of homes to look at...

Have a wonderful day,
Maryann Kepreos
0 votes Thank Flag Link Wed Aug 5, 2009
Some of that varies from house to house and area to area, but overall Yes it happens quite frequently. To give some idea, I am working with a buyer who's put bids in on two bank owned properties and one HUD house...he bid over on each one, but was the 2nd best offer in each case by a difference of $2000, $5000 and $12,000 respectively!
0 votes Thank Flag Link Wed Aug 5, 2009

Just as it is common to pay less than the list price, if it is a really HOT property and there are multiple offers, if you want it , buy it.

You DON'T HAVE TO GET SUCKED into the frenzy. Just like at the courthouse steps and Vegas, something happens in people's brains when they feel they are going to loose something. You have to be willing to walk away and move on to the next property if you have decided what the MAXIMUM amount is you are willing to pay for a property hold steady.

Sometimes my clients' best, highest and final offer is the same as the one I faxed over last week...the first one. Multiple Offers does not automatically translate into 'You have been outbid', unless you are told 'you have been outbid'.

Good Luck
0 votes Thank Flag Link Tue Aug 4, 2009
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