Home Buying in Woodbury>Question Details

Jbridenbecker, Home Buyer in Woodbury, MN

I found a house that is bank owned, the asking price is 92, 070- can I offer 62,000 without offending the bank?

Asked by Jbridenbecker, Woodbury, MN Sat Apr 2, 2011

I am thinking why not offer 50% less then the ask, I figure the worst they would say is no, plus this is for a town-home and there are several others in the same neighbor hood for sale. I am able to move in right away so I would not be pushing out the closing date- I would want to close and move in asap. I have heard that bank owned properties can take a while to sell but I would not be the one pushing out the closing. The home needs work and so the low price would allow me to do the work- I have heard banks don't' care about fixing up the place but like I said I don't want to offend them and have them not take the offer serious. The property has been on the market for over 200 days- I am in Minnesota.

Help the community by answering this question:


As long time REO listing agent I would have to gently disagree with Brette. The bank may not "feel" but the asset managers do. Understand that they are handling dozens of files if not hundreds. Believe me when I say they can get more than a bit put off when they see "low ball" offers.

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.
2 votes Thank Flag Link Tue May 24, 2011
As a long time bank owned listing agent I can tell you that you can indeed offend the bank. Or more importantly, the asset manager who is looking at the offer for the bank.

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
Foreclosure Specialist
Bank Owned Homes Division
Schatz Real Estate Group
1 vote Thank Flag Link Sat Apr 2, 2011
You can offer anything you want, but you will probably not hear back at all with an offer that low. I have potential buyers try that 50% off stuff too and I try to explain that a bank will do its homework to list the house near what the current market will pay, or maybe below to encourage a fast sale. To think they would accept a 50% low offer is pretty wishful thinking. They would relist at 10-15% lower and wait to see what that brings them before accepting your offer. Banks are not giving them away - if they were I would have 20.
1 vote Thank Flag Link Sat Apr 2, 2011
As an experienced agent I have worked with many buyer's providing advice on appropriate market values based on solid market analysis, however I have made it a point not to work with buyer's who arbitrarily throw out low ball offers with nothing substantiating their offer.
0 votes Thank Flag Link Sun Dec 22, 2013
Bank owned homes do not usually sale for less than list price, and when they do not by 50%.

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
0 votes Thank Flag Link Mon Apr 8, 2013
Have you agent do research on comps in the area on expireds, settled, pending, and active similar listings.
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.
0 votes Thank Flag Link Mon Jun 20, 2011
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,

Gary Geer

0 votes Thank Flag Link Sat Jun 18, 2011
Keep in mind that the bank has done their homework on pricing. They may have even had an onsite apprasal done which will take in the actual condition of the property. It is for those reasons that your offer should be realistic or it will probably go no where.
0 votes Thank Flag Link Fri Jun 17, 2011
You need to accurate and professional market analysis, what are the inventory levels? Are there issues with the association? Is it a good layout, a seasoned professional can help.
0 votes Thank Flag Link Mon Jun 13, 2011
A bank will not get offended by an offer, the worst thing that can happen is that they will counter the offer at a higher price. If you have some good data to support your offer, you just might be surprised at what they might accept.
Web Reference: http://www.HomesByWebb.com
0 votes Thank Flag Link Tue May 24, 2011
Hi "J",

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!
0 votes Thank Flag Link Tue May 24, 2011
Hey J,

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.
0 votes Thank Flag Link Tue May 24, 2011
9 out of 10 bank owned properties I have listed over the past 3 years have had multiple offers on them. Most selling at or above the asking price. These are an exception to rule. It is not a buyer's market if the property is priced correctly and many of them are. Today buyers are watching for these properties.


Beat the Competition with the 2011 Foreclosure Buyers Guide.

0 votes Thank Flag Link Mon Apr 4, 2011
Wow, lots of good answers here. Your logic is sound IF you were operating within logical guidelines. Much of what the bank does is based on logic and some of their actions seem nonsensical and contrary to their bottom line. Logic would tell us that the sooner they get this property wiped off the books, the better. They don't have liability for it's ongoing condition or worry about vandalism, etc. And, their no longer carrying a bad debt. BUT, you have to throw what YOU would consider logical out the window. The administrator of the loan/property will be making decisions based on what information they have in front of them and what they consider to be in the best interests of the bank. Sometimes that only boils down to dollars. Good luck~
0 votes Thank Flag Link Mon Apr 4, 2011
As a buyer in a buyer market, you can offer what you would like. I have seen "anything goes" in the 5 yrs of housing decline but remember that fair market value is the agreement between both the buyer and the seller. The seller will also have a bottom line and being it is a bank - the other side is a non emotional party. It's true the bank would like it off their books but they also want some profit. My advice is to find a good seasoned agent well connected to help your offer along.
0 votes Thank Flag Link Sat Apr 2, 2011
While it's true that the home in question has been on the market for 341 days, it has been listed as a foreclosure for only 11 days. The previous days were when the home was not bank owned. As far as the bank is concerned, the clock has been reset to 11 days.

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.
0 votes Thank Flag Link Sat Apr 2, 2011
You can offer anything you like HOWEVER recommend keep looking. What you believe is great offer lender still has many other expenses to consider.

Realtors fees
Closing costs
Attorney fees

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
0 votes Thank Flag Link Sat Apr 2, 2011
Hi J,
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!

Donald James
Weichert Advantage Realtors
0 votes Thank Flag Link Sat Apr 2, 2011
A agree - you won't offend the bank. You can offer anything you wish. If you want to make such a low offer and be successful with it, I would build your case. Point out other homes nearby that have sold for nearly as low, and create a punch list of items needing attention. If there is mold, this opens the door to offers such as yours being taken seriously. Work with your Realtor to justify your offer.
0 votes Thank Flag Link Sat Apr 2, 2011
You can't offend the bank. They look at numbers only, have your realtor do a CMA to see what other homes have sold for in the area. Good luck.
0 votes Thank Flag Link Sat Apr 2, 2011
You can certainly make any offer to the bank that you wish. Typically though such a deep discount from list price would happen only if the property is severely disstressed or has very undesireable traits. If you have a cash offer that helps a lot in getting good pricing. Its always worth a try, good luck.
Web Reference: http://www.lennyfrolov.com
0 votes Thank Flag Link Sat Apr 2, 2011
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