Kym2,

My name is Robin Speronis and I am the Owner/Broker of Zen Real Estate of Southwest Florida, http://www.AskZenRealEstate.com and it takes a strong stomach to compete in the bank owned foreclosure market. You are blind bidding, it is not a very transparent process and you may never know if you are the successful offer, if you could have got it for less.

I advise my buyers to ignore the list price and bid what it is worth to them. However, you must have much information in order to do that. Hopefully you have your own buyers agent that can and will provide you with all the information that you need to come up with that valuation.

Good luck

Your asking about taking the appraisal contingency out but also submiting a offer "at the appraised value". Did the bank do a appraisal and you know what it is? I would walk away before taking out the contigency for a appraisal to get your loan. Unless you don't mind losing your deposit or your paying cash.

Like Grace said, have your Realtor do a comparable to see what the house might be worth. Compare that to the bank appraisial. That should give you a idea of how much to offer with out paying more for the house then it's worth.

Keeping this simple......

Banks do not like contingencies but, as one would expect, do consistantly lean toward the larger amount of momey. They also love CASH deals................

In our opinion, if you really want this home, find a way to make your offer the highest and best.

Good luck

Hello Kym and thanks for your post.

Might I ask, what did the bank mean by "best and highest offer minus the appraisal contingency?" Does the Bank wish for you to remove the appraisal contingency when you submit your offer? If that is the case...my suggestion is to walk away from the purchase or disobey their request and retain your appraisal contingency.

In asking you to remove the appraisal contingency, the Bank wants your assurance that you will purchase the home even if does not appraise for the purchase price. This means that, for example, if you purchase a home valued at $200,000, and the appraisal value is $150,000, then you must either come up with an additional $50,000 in the downpayment or pay the penalties (usually loss of a portion of or all of your earnest money deposit). Often the loss of the earnest money is enough to prevent most buyers from being able to afford their next home.

If the Bank is trying to enforce the removal of the appraisal contingency, I can understand their reasons. Recently, buyers have been offering outrageous sums of money to purchase a home just so that they can be the one selected by the seller in a multiple bid situation. But here's the catch, many of these buyers knew the home would not appraise for the amount of money that they offered, and were counting on the price to be lower in the appraisal so that they'd end renegotiating the purchase price at the lower cost anyway. It's not ethical, but by removing the "appraisal contingency" from the offer, it forces every buyer to select a purchase price that is close to the actual market price or suffer the consequences when the home does not appraise for an artifically bloated price.

Work with your Realtor in reviewing and approving the comparables for this home before making any offers. Also, ask yourself whether you are preapred and confident enough to purchase a home that may NOT appraise for the purchase price. Unfortunately, many of our current appraisals are NOT meeting the sales price.

Good luck and happy home purchasing!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
Co-Host: Naked Real Estate on http://www.blogtalkradio.com - tomorrow's topic "Homeowners Associations"

In our state, we have the following contingencies in addition to the preliminary title report:

* appraisal
* loan approval
* buyer investigation

Naturally, banks will favor shorter or no contingencies. You can certainly strenghten your offer in several way including no loan appraisal contingency....but to protect yourself especially if you're getting a loan, do not give up your loan approval contingency.

If the property doesn't appraise at your offer price, the bank will not lend the money at that price. You can either come up with the difference, or ask to lower your price at the appraised value.

But to make sure you can back out without losing your initial deposit, keep some contingencies in the offer.....always have a Plan B, or a way out.

Good luck!

There are several ways to strengthen your offer: without increasing the price:

1. Increase earnest money
2. Shorten the deadline dates
3. Remove any deadlines that your buyer is willing to do without
4. Remove contingencies (make sure they don't jeopardize your buyer)

Good Luck!