Home Buying in Houston>Question Details

Althea, Both Buyer and Seller in 20009

Best offer for foreclosure home

Asked by Althea, 20009 Sun Dec 9, 2012

Based from your experience what is the amount to offer for a foreclosure home? (i.e. 100% or 105%, covering closing cost or not covering the closing cost, etc..) Please advice. Thank you!

Help the community by answering this question:


Randall Martin’s answer
The local market (subdivision trends) and condition of the home will be the biggest factors here. In many Houston areas, foreclosures can sell quite close to regular resales - especially if they are in the HomePath or HomeSteps programs, etc. My advice would be:

1. Find out if there are multiple offers.
2. Determine if the home is in move-in condition or it it needs significant repairs.
3. Check recent neighborhood sales going back 6 months.
4. Find out what the bank is willing to do regarding paying closing costs, etc.
5. ***MOST IMPORTANTLY*** Determine how much YOU want or need the specific home.

If you really want the home, be prepared to pay for it. If you like it, but are willing to gamble, make a lower offer based upon the research of recent sales.
1 vote Thank Flag Link Wed Dec 12, 2012
Your best option will be contacting a real estate agent that can advice you on the right offer for these foreclosure property that you would like to submitt an offer for.

Best of Luck,

Maria Cipollone

Century 21 Tenace

2 votes Thank Flag Link Sat Dec 15, 2012
Dont ask for closing costs.
Dont ask for anything extra like home warranties, surveys, etc.
Close as fast as possible.
Offer cash if you can.
Check utilities to see if they are on. If not see if you can get them turned on. If not it may be hard to inspect.
As far as prices, each is different.....some you may have to go over asking price, some will sell at 50% of the asking price, so you just have to analyze each one on it's own merits and condition.
1 vote Thank Flag Link Tue Dec 11, 2012
Bruce Lynn, Real Estate Pro in Coppell, TX
Hi Althea, I am sure you are trying to come up with a formula to to utilize when making an offer on foreclosures, however, since every home is a different situation, it is hard to come up with a percentage to settle on. On many occasions you will find that foreclosures attract a lot of people and everyone wants them, so when you have multiple offers the percentage you initially set out with goes out the door. As my peers have mentioned, please make sure you have a buyer's agent to represent you, so you can understand the many different ways you can go about with your offers instead of focusing on just the listed price.

Good luck with your home hunting. Please let me know if you have any other questions.

1 vote Thank Flag Link Mon Dec 10, 2012
Every home stands on its own. Some foreclosures are priced at bargain prices and will solicit multiple offers while others are overpriced by the lender and sit on the market like other listings until their price is closer to where it should be in comparison to the market comps.

If you know the home is priced well and there could be multiple offers it may make sense to offer more than the asking price but that all depends on how much you want the home and a lot of other factors.

Best of luck to you.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o 512.669.5599 m 512.633.4157
listings@dongroff.com | http://www.AustinListed.com
1 vote Thank Flag Link Mon Dec 10, 2012

Every situation is different. Not every foreclosure is priced below market. Hard to believe, but true. Banks, the government...who ever has the property wants the most they can get for it, as any seller would. Don't assume anything! Your best options are to get an experience agent to review the history of the home in question along with the market conditions in the area and they will advise on the best course of action.

Always be prepared by having your financing in order and staying on top of new listings via checking the local MLS or have a Realtor set up a web portal that will funnel new listing information your way.

Mark McNitt
m 832-567-4357
Bernstein Realty, Inc.
1 vote Thank Flag Link Sun Dec 9, 2012
Realtors have access to so much information not available to "ultimate consumers." Foreclosures are a different animal. Are you submitting a first offer or a "highest and best?" Have you walked through the home with an experienced agent? Considering the fact that there would be no cost to you as a buyer, engaging the services of a Realtor makes considerable sense ... and given that you're unfamiliar with the process, it's an absolute necessity. If I may be of service to you, please feel free to contact me. I look forward to hearing from you.

Regards ...

Al Geffon
(713) 213-6350
Web Reference: http://www.har.com/algeffon
1 vote Thank Flag Link Sun Dec 9, 2012
Althea, there are so many people who are under the impression that you have to offer a certain per cent. The most important part is to look at the property and the condition it is in and then based on the comparable active and solds( which any good local Realtor can help you with) you determine the true value that property is worth. Then you submit an offer you are confident with that it is worth you buying it. Hence it is Condition, Location and Value which will determine what to offer!
Endre Barath,Jr.
Prudential California Realty
Beverly Hills, CA 90210

Web Reference: http://www.endrebarath.com
0 votes Thank Flag Link Sun Dec 16, 2012
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.
Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
0 votes Thank Flag Link Sat Dec 15, 2012

The best purchase offer for a foreclosed home includes:

1. an offer amount that is an accurate reflection of the current local market and condition of the home. Without specifics any opinion rendered on this would be pure "guess work."

2. seller defined accurately completed paperwork.

3. a letter of funding pre-approval or proof of funds letter (banks prefer cash offers for these homes)

4. a sizable deposit amount

5. minimal to NO contingencies beyond an inspection contingency

6. NO closing costs built into the agreement

There are no guarantees but by following these outlined guidelines you should be in the running.

Best wishes,

0 votes Thank Flag Link Sat Dec 15, 2012
It all depends on the property itself. I have bought foreclosures for both first time homebuyers and for investors.
Are you working with a Realtor yet ?
If not, or if you would just like a second opinion,
Check out my website and send me an e-mail with the property you are interested in.
0 votes Thank Flag Link Sun Dec 9, 2012
Sorry, Althea, but you are not going to get a specific answer to your question. That is because there is no generic, one-size-fits-all answer. The answer must be tailored to your market, you and the property in question.

You should have an experienced local Realtor answer your question. There will be many more questions that will come up in the purchase of a home and your Realtor is the best one to answer your questions for you.
0 votes Thank Flag Link Sun Dec 9, 2012
You need a buyer's agent to determine what you should offer. It depends on the market and the area and what has been going on in the past 3 to 6 months in that area. It also depends on the condition of the home and how long it has been on the maket.
0 votes Thank Flag Link Sun Dec 9, 2012
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