Home Buying in 60625>Question Details

Theresa Scar…, Home Buyer in Chicago, IL

I am looking at making an offer on a foreclosed home....

Asked by Theresa Scarbrough, Chicago, IL Mon Jul 30, 2012

but I only have 5% to put down at this time. What are my chances of the seller accepting my offer? I have preapproval already and not for an fha loan as well.

Help the community by answering this question:


Hi Theresa,

There can be several factors determining the likely acceptance of your offer with 5% down. If it is a multiple offer situation and someone offering cashing, it is less likely that you will be selected. You still could be if you are going to be owner occupied and the other person is an investor. It also depends on the other variables and how "strong" your offer is compared to the other offer(s). Price offered, closing time, earnest money are some of the other factors they also consider.

If you have any questions you would like me to specifically answer, feel free to contact me at jolichwier@PatrickJeffreyRealty.com

Good luck!

0 votes Thank Flag Link Sat Jun 29, 2013

Congratulations on your preapproval! Sellers, whether a Bank or an individual, will always consider a preapproved buyer over one who has yet to get her financial matters in order.

Your chances are as good as any. A use of a Buyers Agent will provide you an advocate that will go to work to help you achieve your goal.

If you have not yet selected an Agent you may call me at 224-805-2616. Together we'll discuss the right approach as we find out as much information on the property you selected.
0 votes Thank Flag Link Sat Aug 4, 2012
With a 5% down payment and a strong pre-qualification letter, the bank/seller might choose you. A 5% borrower is better than a 3.5% borrower. Just be sure that your pre-qualificaiton letter is complete. If you need help, i would be happy to give you advice. Call me or email me at joanna.weiss@standardbanks.com
0 votes Thank Flag Link Fri Aug 3, 2012
It depends on the type of financing that you are using. if you are using a Homepath loan on a Fannie Mae property, than you have a high likelihood of getting the deal accepted. If you are using a 5% down conventional loan, then it may come down to the price you offer, and the competition of other offers that come through.
0 votes Thank Flag Link Tue Jul 31, 2012
Hi Theresa,

Most bank owned properties receive multiple offers, and the bank will generally look to take not necessarily the highest offer, but the one that looks like it has the strongest chance of closing (preferably in the shortest amount of time). Thus, many of them end up going to cash buyers who can close quickly.

If your debt-to-income ratio is strong, you may be able to purchase a Fannie Mae or Freddie Mac-owned property for as little as 3.5% down -- your offer will still need to be strong if the unit is priced well. Your Realtor should be able to keep a close eye on the opportunities for you, and you should be prepared to act quickly in a very competitive market.
0 votes Thank Flag Link Mon Jul 30, 2012
The Banks, on a foreclosed home, want to see a STRONG offer, not necessarily the highest offer, so that they know that it will not fall out during the Escrow:
They prefer CASH for this exact reason; but they look at other things:
Using a Realtor is usually a requirement for this exact reason.
They will look at the financing as well as the Lender you are using; which is why it helps to get the loan through the original Bank.

Please get a Buyer's Agent and follow their advice.
0 votes Thank Flag Link Mon Jul 30, 2012
It really depends on the property. Since it is owned by the bank, they will have certain requirements you need to meet. Once I know what property it is, I can tell you exactly what you need to do to put an offer in. Let me know if I can help!

Email me directly - sarahz@innovativepropertyconsultants.com
0 votes Thank Flag Link Mon Jul 30, 2012
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