Home Buying in 60532>Question Details

Megand63, Home Buyer in

Can you negotiate the price of a foreclosure?

Asked by Megand63, Fri Jan 13, 2012

I am only interested in a foreclosure and was wondering if you can negotiate the price? The price has not been reduced since the listing.

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13
Yes. Absolutely. Everything is negotiable. Having said that, It is usually negotiated during short sale process with the lender by broker/real estate agent. Lender also sends out an appraiser or BPO periodically to make sure market conditions are reflected in the price besides condition of the subject property. This is a lengthy negotiation period to get to the right price.
0 votes Thank Flag Link Mon Aug 6, 2012
While all the guidelines provided below are correct, there is one exemption from the rule. It is called a "multiple offer situation". Many buyers get confused when there is another offer or more on the same property. Usually it happens in the first week after the home is listed and you can be sure it's a hot deal if you have to fight others to get it. In situations like that, 90% of properties sell at the full asking price and a vast majority - over the asking price.
0 votes Thank Flag Link Sun Jan 15, 2012
Thank you all for your advice I will feel much more confident in this process. Found out it is a fairly desirable property and now know we may not have much room in the price. Have a good weekend!
0 votes Thank Flag Link Fri Jan 13, 2012
Having listed many REOs/foreclosures over the years I'm surprised the price hasn't been reduced. The major lenders I worked with normally would reduce the price every 21 days or so and expect to get 95% of the list price. But like people the lenders are all different and some impossible. Keep in mind that REO prices are highly discounted already and offers 20% or more under list are usually ignored.
0 votes Thank Flag Link Fri Jan 13, 2012
Yes you can. It depends on a number of factors everything from Seller requirements, fair market value, days on market, condition of property, number of offers on the table ect..... Your Realtor should be able to help you assess a good starting point for your offer.

Good Luck!
0 votes Thank Flag Link Fri Jan 13, 2012
Megan,

Absolutely....however, the degree to which the lender is willing to negotiate will vary depending upon the circumstances. One thing is for certain....an offer that is anything less than the asking price may be better received if it included records that support your offer, estimates, documentation of necessary work, photos, sales information, etc.

In the event this is a highly desirable home with a number of interested buyers you may wish to consider your position carefully and not eliminate yourself from the chase too soon by making an offer that will not get the bank's attention.

Good luck,

Bill
0 votes Thank Flag Link Fri Jan 13, 2012
Suzanne gave you a good answer, you can always put in any offer, but at the end it is up to the bank or lender whether to counter or just say no, or sell to another buyer with a different offer.... It is not exactly the same as
you would be negotiation through agents with the actual property owner....

But to the question can you, the answer is yes, will it get you the property is another question.

Good Luck
Edith YourRealtor4Life and Chicago and Northern Illinois North Shore Expert
Working always in the very BEST interest of her clients, buyers, sellers and investors alike
0 votes Thank Flag Link Fri Jan 13, 2012
These are all great answers. The other factor you need to take into account is the asking price. I had a client interested in a property in Lisle that was bank owned. The price was far below market value, and there was an accepted offer on the property 3 days after it went on the market.

I always explain to my clients not to get hung up on the asking price and how much off of the asking price they can get. They need to look at the whole picture, such as what is the home worth (in today's market, of course).

Good luck to you.
Mike Hagen
Goodwill Realty Group
630-248-2292
0 votes Thank Flag Link Fri Jan 13, 2012
You can always put an offer in for anything. If it will get accepted is another matter. Banks are usually looking to get fair market value or just under. They usually are not going to take big hits on price, but at the same time, they want to sell.

If you like it, put the offer in - all they can say is no or counter offer. But please do yourself a favor and use a professional Realtor to help you - not the listing agent. Banks are often difficult to deal with and you need someone in your corner to advise you. It doesn't cost you anything and you will save yourself time and heartache.
0 votes Thank Flag Link Fri Jan 13, 2012
It depends on the situation, but basically you won't know until you try. The bank is looking to minimize their mortgage loss, and they also have their eye to the local market value of the property. Most important is that do your homework, ask a lot of questions and have your Realtor ask a lot of questions.
0 votes Thank Flag Link Fri Jan 13, 2012
Of course, like any negotiations it depends on different variables. For example, who the bank is, location, and if it will be in high demand. There are times when one house can get multiple offers which changes the game plan in negotiations.
0 votes Thank Flag Link Fri Jan 13, 2012
Hi Megan,

A true "forclosure" is a property that is sold at auction (because the mortgagee defaults). The lowest offer price prevails at auction.

"Short sales" on the other hand are not sold at auction and are typically negotiable.

For a quick read, click on this article which explains some of the details for different types of distressed properties... http://www.homefieldrealtors.com/Web/AR419461/CustomContent/…

Regards,
David Field
Managing Broker/Owner
Home Field Realtors
0 votes Thank Flag Link Fri Jan 13, 2012
There are many steps in a foreclosure process, so the price you can negotiate or not depends on where it is.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Fri Jan 13, 2012
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