Home Buying in Wilmington>Question Details

Lkn1224, Home Buyer in Wilmington, NC

How does a foreclosure get a listing price? Would it be unreasonable to offer the bank 80- 85% if there are no other offers on the table?

Asked by Lkn1224, Wilmington, NC Mon Oct 31, 2011

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If the foreclosed property is listed in the mls with a real estate agent, that agent has given the bank a list price that they feel is the market value for that property. The bank doesn't always listen and sometimes sets prices according to their own agenda.

You can offer whatever you want on a property. You won't hurt anyones feelings and you just might get it!

Good luck,

Peter
0 votes Thank Flag Link Sat Jan 21, 2012
You can always offer what you want...and due to it IS a buyer's market...trying has never hurt anyone...so yes I would try. However...look at the entire situation as best as you can will also help you know what to do....for example...how long been on market, how many times has bank already reduced price if any, location and condition of property....but again...I would definitely try! let me know if I can help!
0 votes Thank Flag Link Fri Nov 4, 2011
What makes you want to offer 20% below asking? You have to have a good reason for doing that. Banks are not going to just give it away for no good reason. If you are in an area innundated with foreclosures, maybe, but it will still be tough especially when you are dealing with a big bank.
Web Reference: http://Michaelliewhomes.com
0 votes Thank Flag Link Mon Oct 31, 2011
Plain and simple...sure, give it a try, every deal is different! Different Banks and different listing agents use all sorts of methods to come up with a listing price.

Some Bank Owned properties may sell for much less than 80% of asking price.

You never know until you try. In this market, I recommend low balling everything at first attempt. Sellers should simply be flattered there is interest, hope they can negotiate a deal, and understand that it's just an initial offer, no matter what an offer comes in at, in this market.

Good luck and happy selling!
Bill K Bill@Cashiers.com
0 votes Thank Flag Link Mon Oct 31, 2011
I coldn't let this one pass... and these are opinions.
It does depend on the property. .. How long has it been on the market? How much does the bank have tied up in it? Is the bank ready to “dump it”? If it has been on the market for awhile and has not sold I would think the bank would be happy to consider most offers. So I would say, yes, make the offer at 80 to 85% of asking price. Let me know how I can help!
0 votes Thank Flag Link Mon Oct 31, 2011
Hey There,

Broker Price Opinion (BPO) - Banks hire agents to do price comparisons of what homes are selling or sold for in that area. As the property sits on the market, the listing price eventually drops. When offering 80-85 % of the listing price, you may get a counter offer, they may sit on it or you may not get a response at all. If the property just came on the market, low ball offers usually don't work. Just watch until the price drops to a level you are thrilled about then give them your highest and best offer. Dan Betz Live Oak Real Estate- Specializing in Bank Owned Properties 910 231 4923
0 votes Thank Flag Link Mon Oct 31, 2011
Depends on the property. I worked with a buyer this summer that went after a foreclosure that was listed at $825,000 but it wound up selling for $675,000. This is despite 3 multiple offer situations along the way. We picked a target range for what we thought the home was worth and stuck to that game plan. It took 7 months of negotiations.

The point is that if the home is priced incorrectly, then offer what is fair. If the home is priced fairly to begin with, then test them.
0 votes Thank Flag Link Mon Oct 31, 2011
Congratulations you are on a roll with the great questions today! The short answer on your first question about where the price comes form is that it is set by the bank and the listing agent based on the market value of a foreclosure in that community (That is based on the agents understanding of that market). As many of the answers have said it is going to be on a case by case basis. Once you get into the home and decide that you like the home your agent should give you an idea of what homes have sold in that area as straight sales (normal market conditions), short sales, as well as foreclosures. That will help you see the average price per square foot in each of those market conditions. You then will want to weigh in the property condition before submitting your offer to either go above or below those comparable properties based on the intangibles of that home (lot location, curb appeal of the home, move-in ready vs. repairs needed, etc). Is it reasonable to offer 80 to 85%? Absolutely, if you are looking for a deal and if you would not lose sleep if you did not get that home. But in the end if you really love the home and want the highest chance of getting it then I would recommend coming in a bit stronger on your offer. Best of luck. Jeff Lesley 910-297-7071, JLesley@Century21Sweyer.com
0 votes Thank Flag Link Mon Oct 31, 2011
There are a lot of factors to consider in each transaction. A big variable is the condition of the home. My recommendation is to get in touch with an agent who can help you determine a fair offer by running a current CMA. It costs you nothing. There are good deals out there but from what I have seen, if the home is in good condition, the bank isn't going to let it go for a huge amount below market value.
0 votes Thank Flag Link Mon Oct 31, 2011
I have seen banks accept much less than 80%, but that is in my market. You need a Realtor from your market helping you make the best decisions. If the property is listed in the MLS, seek out an agent to represent you and your best interest...you will not save any money by not having representation.
0 votes Thank Flag Link Mon Oct 31, 2011
You cannot assume the login or reasoning behind the LISTING PRICE:
Human Beings are involved.

Sometimes the LISTING PRICE is set in relation to the loss the Bank is incurring; and you and I do not know those figures.
Usually the Bank has done a BPO through a Realtor, and they determined the Market Value of the House. They took into consideration the repairs needed to bring it up to par.
And sometimes, the price is intentionally set LOW to attract Multiple Offers and create a bidding war.

We don't know where we are until we do an anlysis:
You will need a Buyer's Agent to do this intelligently: Have them do a CMA to judge where the LISTING PRICE is at and where you want to be with your OFFER.
It would be a waste of time to make a LOW-BALL offer, and if you offer too high (because you love it and see hidden value,) you will just run into the Appraisal.


A Buyer's Agent costs you nothing; the bank is paying, and you need that representation.


Good luck and may God bless
0 votes Thank Flag Link Mon Oct 31, 2011
I assume you are talking about a bank owned home and not one in foreclosure. The bank has foreclosed and now owns the home. They will get BPO (broker price opinions) to determine the current market value in the condition it is in. They do not look at how much was owed - that is history now. They look at how much it is worth today as it is and then determine a value they could accept for it. Banks normally accept 2-4% below the listed price, not 20-24% below and they will often just ignore those offers.
0 votes Thank Flag Link Mon Oct 31, 2011
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