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Trulia Brook…, Other/Just Looking in Brooklyn, NY

Can one negotiate the price of a bank owned home?

Asked by Trulia Brooklyn, Brooklyn, NY Tue Jan 29, 2013

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5
Luke Constantino’s answer
The truth is:
"Anything is Negotiable"

Due to the large inventory banks have now, it has become easier to negotiate down a price on an REO (more so now than ever before).

Word to the wise:

Get a skilled Realtor to be on your side: They have experience in dealing with banks and...


IT'S FREE TO YOU!!!



Luke Constantino
Realtor
REMAX NEW YORK
(212) 300-3919
lukeconstantino@gmail.com
261 4th Avenuue, Brooklyn NY 11215
0 votes Thank Flag Link Wed Jan 30, 2013
BEST ANSWER
If you are paying CASH you may have a chance at getting a bank owned home for less than list price.

If the home has been on the market for a while, let's say over 40 days you may have a shot at getting an offer under list accepted.

Be careful offering less than list. With multiple offers back in play banks are sure to accept highest and best offer.

Kawain Payne, Realtor
0 votes Thank Flag Link Tue Jan 29, 2013
Each situation, each lender and each asset manager can be different. In Charleston SC it seems that some banks will negotiate more than others. Many banks are pricing their listings for a quick sale and are trying to encourage multiple offers. Banks tend not to take a lower price if the property has only been listed a short time. After a month or so if showing activity slows down they might drop the price to generate interest. Find an experienced buyer's agent to help you explore your local market.

Best regards,
Dan Simon, Realtor®
Carolina One Real Estate
Direct #843-303-1464
dsimon@carolinaone.com
http://www.CharlestonHomesForYou.com
3 votes Thank Flag Link Tue Jan 29, 2013
Good afternoon,

Your best bet in determining what ANY Seller will accept as an offering price---whether that's a bank-owned foreclosure or a regular MLS home---is to make an offer. Determine your maximum price based on your mortgage prequalification and make your offer accordingly.

If you are a cash Buyer, then your Offer consists not only of best price, but strongest terms: willingness to accept the house "as is" and ability to close VERY quickly (usually within days of acceptance of the Offer).

Understand that, with foreclosures, the "Asset Manager" at the bank that owns the home may have a bottom line number she needs in order to sell the home.

Further, you can never know what other factors affect a final decision on negotiating with Purchasers:

-Does the Asset Manager have a calendar deadline to get the house sold and off the books?
-Does the Asset Manager have any flexibility in final pricing the bank will accept?
-Would the Asset Manager be willing to allow for a mortgage contingency instead of "cash" for a Purchaser? (Mortgage contingencies are fraught with hazards for the Asset Manager: what if the Purchaser is denied for the mortgage or the Purchaser's Lender is tardy in providing approval and/or closing?)
-If a Purchaser offers a price substantially higher than other Offers, can the Asset Manager agree to effect certain repairs to the property prior to closing at the Bank's expense instead of selling the house "As is?"

I could probably add a few other "unknown factors." Bottom line: The Bank that owns the house is a business entity. When buying a home from a regular Seller, there are some emotional considerations that Seller has that affects the decision-making; Banks have no such obstruction. A Purchaser can never know what controls the Bank's decision-making process on any given property. There are NO "givens" or certainties about REO/Bank-owned properties and how the transaction should proceed when negotiating Offers.

I have noticed of late that Asset Managers have become slightly more flexible when negotiating with Buyers. Some banks are actually effecting minor repairs in order to facilitate a Purchaser obtaining mortgage financing. HIstorically foreclosure properties have sold to all-cash buyers. But with a large inventory of foreclosed homes, and the fact that cash investors will only buy with a substantial discount off list price (because they're paying cash), I believe that more Asset Managers are realizing they need to be more flexible with Buyers obtaining mortgage financing.

Put your best foot forward, make your Offer and begin the negotiating process.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528

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1 vote Thank Flag Link Tue Jan 29, 2013
Yes. Be aware though that the process can take some time to complete. You should allow extra time to reach a closing table when dealing with bank owned.
0 votes Thank Flag Link Tue Jan 29, 2013
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