Generally speaking all asking prices for foreclosed-upon homes are negotiable and are a starting spot for negotiating. However, a "low-ball" offer, particularly on a newly listed property, usually won't be successful. In my experience, reasonable offers are the wiser starting spot. They usually are able to be negotiated to a successful conclusion. Be sure to know your stopping spot in the offer process and be sure you aren't "upside down" in the property after the cost of any repairs and updating is added back into the final purchase price.
Listen to the advice of your agent.
Syan Real Estate
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You can offer whatever the price is that you are willing to pay and think the property is worth to you as a Buyer. The bank can counter offer you what they think the property is worth to them and they typically ignore low ball offers and most of the time counter highest and best price to all parties who sent an offer.
David R. Indermill
Re/Max Hall Of Fame, CDPE | Since 1998 | Luxury Real Estate Advisor
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The bank may also be looking for a cash offer or a buyer who is ready to go and pre approved. That can misrepresent what the house is really worth.
You might, I have done that, for my customers when I was working as a buyers agent.
Making offers is really less complicated than you would think, but almost no one knows how to do it correctly.
If there are going to be a lot of offers on a house, writing a low offer is really just a waste of time. If there are no offers on the house, say it has been on the market for a couple of months, write that low ball offer.
It really is that simple.
Harrison K. Long, Realtor agent and broker, Coldwell Banker Previews.
As in any buying situation the buyer can make any offer he or she wishes, but then you must deal with the consequences, namely not getting the home you desire if the offer is not acceptable. In most cases there are multiple offers on foreclosed homes so you are dealing with competition, which can bid up the sales price (while many REOs sell below asking, although not significantly so in most case, but many sell over). The bank will decide what they are willing to accept on the basis of a BPO (Broker Price Opinion) or more than one which will be based on comparable sales. The ability to negotiate will also depend on the bank itself and who is responsible for the final decisions, along with what the other offers are.
Understanding the comparable sales in the area will help you and your agent make an informed decision, and of course your agent should be in touch with the listing agent to gather as much intelligence as possible before making an offer. You will also want to consider the home and its condition in your thinking about what you are willing to pay.
Our advice to individuals in your situation is:
If you really, really like the home and this is THE ONE. Make your first offer your best offer because of the home is desirable you probably will no have a second chance to improve your initial offer.
Hope this is helpful. Good lick.
You can always offer less. In fact homes that are already owned by the bank (and not a short sale) are much more negotiable. Short sales usually list for less than the bank is willing to take. They can be a dissapointment for buyers who do not anticipate this. One big drawback about bank owned to look out for is, banks are not required to disclose problems with the house such as bad plumbing, electrical or roof that regular sellers are required to disclose. Get an EXCELLENT inspection before you complete the purchase.
As I represent both buyers and sellers of foreclosed homes, I have seen how the banks react to various offers. As noted already in the other answers, you can offer less and that would be the typical scenario. Whether that offer gets accepted or not is dependent on many factors. A good buyers agent may consult with the listing agent, and based on the buyer's agent's market knowledge, offer you advice on what would constitute a fair offer.
And for those listings where you wouldn't offer less than asking price, keep in mind these recent bank owned sales in 92009 Carlsbad and 92056 Oceanside:
2934 Rancho Cortes: asking price $939,900, sales price $975,000
7598 Circulo Sequoia: asking $849,900, sales price $900,000
4787 Via Colorado: asking price $336,900, sales price $408,000
1330 Calle Goya: asking price $343,900, sales price $380,000
Dee is right. It is liking buying from any other seller than you can offer what ever you feel to be fair value. However, I have been in a few offers where there were mutilple offers on the property. An agent in my office told me about one that had 15 offers on the property. If you are working with an agent, you should have your agent try and reach the listing agent to see what activity is on the property.
I usually do this for my clients and a CMA to see that they make a offer that will get them countered, but not over pay for the home. If you need any help, please don't hesitate to contact me Catherine Barden at 760-815-3866 I am a north county real estate agent. Or visit my website, with information about foreclosures.
As with any listed property, you can always offer less than the asking price. The real question is, what is the market value of the home and how much do you want it. If you really like the home, offer close to or at market value. If you are looking for a deal, offer what you are willing to pay and be ready to make multiple offers before you find a bank willing to accept the amount you are offering.
Good luck in finding a great home, at a great price and negotiating a great deal; and Dare to Dream.
Real Estate Consultant
RE/MAX Palos Verdes Realty