I agree 100% with what Grace wrote below. How much do you want the property?
I just helped a client purchase a foreclosure in Hollywood. There were multiple offers on the property. The bank came back and asked everyone for their "highest and best" offer. We upped my client's original offer by $5k, to full price, and his bid was accepted. We will never know for how much less he possibly could have gotten the house. But my client still got a great deal, and is now started on adding the kitchen that didn't come with the house! He is not worried about the $30 per month in mortgage payment he would have saved if he got the house at his original offer price...
I know everyone thinks they should be able to steal properties right now, but you need to consider how good (or bad) the asking price is to begin with. If it's good, you will not be the only person to realize that.
Please let me know if I can assist you further. Good luck!
it all depends on how much you want the home in question. If you're simply "fishing" for a bargain deal, then get aggressive. Keep in mind, however, that most of the time, you will NOT get the home. Occasionally and very very rarely, you'll find a bank that needs to simply dump the home and I hope you find that elusive home, however, in most cases, banks as well as private owners have to make a certain amount of money on the home in order to close their books or move to a new property.
The best way to determine the reasonable price "range" for the home is to work with your Real Estate professional in obtaining comparables for the property. You'll also need to get the property profile to see the indebtedness on the home. Remember, everyone wants a bargain, but if you really want the house, you'll need to be prepared to pay a fair market value for the home--not the bargain price.
If this is a short sale, for example, and everyone offers a very low amount to purchase the home, it may be in the bank's best interest to foreclose the property, spend a little money to renovate it, and then resell it on the open market. Many of the banks are doing that right now, which is why so many foreclosures are 'trickling", rather than flooding, the current real estate market. The bank does NOT have to accept a short sale, and if the BPO (a price evaluation completed by a real estate professional) shows that the home is worth more, then the bank will wait to get the higher offer.
Similarly, an REO property does not have to be sold at a bargain price as far as the bank is concerned. They may wait for a better offer. Only after quite some time, if the better offer does not come around, will the bank consider the "bargain basement" price.
Finally, keep in mind that in most areas around the country, we're still looking at a fairly robust home sales period. Buyers have been enticed by the $8K government stimulus, and will be out looking until at least November 2009. If you wish to be truly aggressive in te purchase price of a home, you may need to wait until buyers have left the market in order to exercise your buying power--and for now, that would appear to be after November 2009.
Good luck and work with your Realtor to appropriately price your offer.
Grace Morioka, SRES, e-Pro
Area Pro Realty
That means that for the most part, only homes where sellers are asking market value are selling.
SImply ask your agent to give you a CMA estimating market value, then bid slightly under.
Also bear in mingd that your lender will perform an appraisal, which shuld prevent you form paying over market value.
Doing your homeowrk on values in this market is essential for not wasting your time and running around in circles, taking unnecesarry steps, and making ridiculous offers.
The only one that can help you do this is a Realtor with this saavy.
Once you know market value, see how much mortgage is left over, because the seller may very well get caught in a Short Sale situation.
Placing the offer is easy. Just do it! Make your offer and see what happens. Some agents will say there is an offer on the table, and they begin taking back up offers to see which one to take, so make sure that if you are going to make an offer, you have been pre qualified, and have at least a hefty deposit to submit to escrow to show your best intent.
God Luck and if you need assistance, just come to my website and begin finding the BEST possible house for you or loved ones!
The main thng you need to know is if the house is a short sale or not. If so, then you can only offer what the bank may take. WIthout that information it is difficult to answer how you should offer.
You should have representation for advice, and the comps in the area. All offers are different and have different circumastances. By all means it is best to start lowr, but on great properties recently there are multile offers, so sometimes you need to make your best offer first, Again, I would need to know the circumstances.
If you need representation fel free to contact me directly,
South Florida Brokers
Why leave money on the table with a high first offer. Play off their motivation. You can always counter with a higher offer later. After you make your first offer you will get an idea as to how motivated the seller really is.