You are still dealing with a human being on these and I have seen more than one buyer tossed out of the running for low offers.
As said before if you can justify an offer with comps and market data that is one thing. But just throwing out a number usually doesn't work.
The worst they can so is not only "no" but instruct the agent not to pass on any more of your offers. And, yes, I have been given that instruction regarding low ball offers (industry term).
Now if you can legitimately back up the offer with good comps, that may make a difference. Show the work that needs to be done and price it out (and don't inflate this). But most low ball offers don't take this approach even if the comps are available.
Show why you are offering what you are offering. If you can't justify it...
Oh, one other person you might tick off in this process. The listing agent. He/she will have input on the offer as well. If they feel you are just throwing out an offer, they may resent what they see as you wasting their time.
Question, how long have they been at this price and what was the original price?
You may also want to consider some good help on buying bank owned properties, the 2011 Foreclosure Buyers Guide.
Good luck. Let us know how you do.
Steele V. Propp
Bank Owned Homes Division
Schatz Real Estate Group
Making an offer for 50% below list even if your offer is all cash, you will more than likely not even get a response.
Kawain Payne, Realtor
It is fine to come in at a lower price in order to get the best deal that works for you, but you must work with your agent to present a realistic offer. Bank owned properties often have multiple offers. A low ball offer may put you out of the running entirely instead of a counter offer.
You can offer what ever you like but to be successful you should do your homework prior to making you offer. Ask an agent to give you some recent sold comparable property information to help you determine the market value of the property. Then compare that to what the bank is asking. Normally the bank will have had multiple opinions of value from agents and appraisers prior to placing the property on the market. Then make your offer based on what you want to pay. Keep in mind you may not be the only one interested in this property and the bank may be considering other offers when yours goes in for consideration. Bottom fishing is not a good practice to be successful with any purchase (some sellers do get offended) unless you don't mind if you don't get the property. If that's the case offer anything you want. The bank may accept, counter, or flat refuse your offer. Remember banks have a process they follow in selling a property and they have other options to sell this property if the current process is not in their best interest.
All the best,
Dealing with a bank is like dealing with a large corporation...they don't think or "feel", they base their approvals on statistics only; mainly sales prices of similar homes which have sold in the past 3-6 months. If you are working with an agent, ask him/her to provide you with recent sales comparables of similar closed homes and base your offer on those sales. If you make an offer and the bank rejects it, go back to them again with a new offer. The name of the game with banks is patience and perserverence. Good Luck!
If the home has been on the market that long, chances are the bank will look at your offer. My suggestion would be to first find similar comparables that have sold within the last 3 months. Remember, banks are not like you and I. In other words they will not get offended or have their feelings hurt.
Beat the Competition with the 2011 Foreclosure Buyers Guide.
My past experience with Chase (the owner / loan servicer) is they tend to reduce their properties 10 percent about every 21 days. So it's probably premature to be offering such a substantial discount, especially since the house has been listed for only 11 days.
A short closing will be beneficial as long as your lender can do a short closing (less than 30 days) And presumably the home has been priced based on the current condition. It was previously offered as a short sale for $105,000 and has a taxable value of $147,000. There are two bank owned 3BR/2BA homes (smaller) within 1/4 mile for $102,000.
I also see that Chase is requesting that you pre qualify through one of their lenders. You might need to pre qualify with a Chase banker but by law you aren't required to use their lender. However there may be some incentives to using Chase. But as always, shop around.
Less the amount you offered. May not be worth lenders time
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Good questions! First lets talk about financing. Are you making an all cash offer or are you financing. If you are financing is it FHA and will the property pass an FHA inspection. And if it needs repair are you applying for FHA 203K or 203Ks?
Is the property truly bank-owned or is owned by HUD, Fannie, or Freddie? Does the bank own it or are they handling the deal for investors. There are different offer rules for each.
As a buyer you need a professional Realtor on your side. It costs you nothing as the fees are paid by the seller. Your Realtor should know the market extremely well so they can guide you on a good offer.
You should interview two or three Realtors. Ask them if they have successfully negotiated similar deals. I have had some success with buyers purchasing town homes in Woodbury, so much so that almost every week a different Realtor calls me and asks how I got it done. All Realtors should show you comps of what has been selling, how long it has been on the market, etc. I think more important in this area is a Trend Analysis. My clients find my Trend Analysis Tool more important than the standard CMA. for showing them what the real price of the property should be.
Your goal is to make an offer that will start a conversation with the seller. A professional Realtor should have the tools and expertise to guide you through the process and getting the town home at the best possible price. Good luck!
Weichert Advantage Realtors