I'm offering 5k less because that is my max loan amount. I've already been preapproved (not just prequalified).

Hi Kim,

Increasing the deposit may be a good idea, but wont make a drastic difference. Right now in this market the properties are selling either at asking or above asking price. Bank-owned property, when making their decision on which offer to choose look at this 2 items, strength of offer (by looking at financing) and net amount to them.

Why are you offering the $5,000 less? I do understand you are not asking for any closing cost, but you must understand that there are a lot more buyers.

Hi Kim,

With bank-owned properties, the selling bank wants to know you are serious about buying. That's why they sometimes ask for higher good faith deposits. The biggest risk in buying a foreclosed property, beyond receiving no prior ownership disclosures regarding material facts that may affect the value of the property, is that the bank addendums signed by the buyer prior to acceptance call out for the inspection and loan contingencies to be removed much more quickly AND passively. Which means that if you don't get your ducks in a row quickly by performing inspections and getting loan approval, your deposit could very easily be in jeopardy.

Increasing your deposit beyond 2% won't necessarily make your offer stronger. Being a buyer that shows proof of funds for an adequate down payment and has a fully underwritten pre-approval on their loan WILL strengthen your position with the bank because you have shown you can close.

I hope this helps.
Tara

Tara Steinke
Residential Sales and Appraisals
San Diego
619-384-6014
SDRealtor.Tara@gmail.com

Kim, it sounds like you are on the correct end of the learning curve! I've heard of some buyers making up to 100 offers before they are successful! I don't know of any personally but it is rare these days for a buyer to get an REO their first time out.

Best,
Dot

Hello Dot and thanks for responding. The property is new (less than a week old) and I'm not asking for ANYTHING. I've learned from past experiences :).

Kim, increasing to 3% might help. Has the property been on the market long? Are you asking for any seller concessions?

Many properties are selling in multiple offers now, so you do need to make your offer as strong as possible.

All my best to you - I hope you find your dream home!