Yes, it is possible...but it depends upon how skilled your agent is when communicating to the listing agent.
I am a homeowner in the 91915 zip code (Eastlake/Otay Ranch) area and I have already seen most of the inventory here and know many of the agents here. Unfortunately I do not believe an offer 10% less then the asking price on an REO makes sense. Typically REO's in my community of Eastlake/Otay Ranch are under priced which creates many bidding wars. Many REO/bank owned companies will take the top 5 offers and send out a "highest and best" addendum, its basically your last chance for the home, further driving up the price. Many of the banks that own the properties through my experience prefer Cash or Conventional offers, I know because I represent many buyers in our community.
Regarding buying a short sale with a VA loan that may be a little easier but it depends on how the listing agent handles the short sale. Some Short sale listing agents...send 10 offers to the bank which can make the transaction even longer then it should be...while some short sales agents..lock on to one offer submit to get the approval for one buyer, my opinion that is the quickest and easiest way to get it done, but some agent would rather do it the other way. I know the school system very well here in the 91915 zip code because I have 3 kids that attend Eastlake High and Eastlake elementary. Call me for more info about housing here in my community of Eastlake/Otay Ranch:

Vincent Villafranca, REALTOR, ABR, CDPE
619 972 8798
vincentsellshomes@gmail.com

Unfortanately there is no set amount for discounting a bank owned property. The one problem you may face with VA is the property passing the VA appraisal. The VA appraiser acts like a home inspector so anything they flag will be required to be fixed prior to closing. The problem being the banks willnot accept an offer with this contingincy nor will they fix anything, you would be responsible in most cases to go in and do it your self at your cost prior to closing. They will allow this as you will sign a hold harmless outling that any work performed is at your risk and if you do not close the improvements become property of the seller. Some other things you should know prior to bidding on a bank owned home are that you should do your inspections prior to bidding as the sale is as is and the bank will not negotiate with you after they agree on a price. You should include your preapproval with your offer. Your deposit should be at least 1% of the sale sprice and in certified funds. As well you should not ask teh bank to fix anything or include any contingincies as your offer may not be accepted. Lastly be ready to close within 30 days from acceptance. Good Luck with your purchase.

Dear Mary Ann,

If I represent you , your chances are 100%,
PLUS I typically wil get my clients $12,000+ SELLERS CREDIT paid by the bank to help you
coverclosing cost.

I specialize in Bank owned properties and I LOVE working with Military famlies.

Over 30 years in Real Estate.

Robert Chartier
BROKER
858-395-8519

In most cases foreclsores "if priced right" are at market value or below market value. Writing it 10% low could lose you the home. Have your agent do the work. Have them do a CMA on what the home you want to buy is worth and go from there. 10% more 10% less it doesn't matter - know what the home is worth in todays market by having your agent do the work - don't trust the agents or banks list price - it's foolish.

Hello Mary Ann,

Currently, I am working with a VA buyer and have found Va loans along with FHA loans have become more frequently used and accepted by banks. However, each property is different. Have a Realtor provide you with research about the property that you would like to make an offer on to make a more sound decision.

Make it a great day!

Laura Kelley
REALTOR
Keller Williams Realty
619-985-3362 http://www.LauraSanDiego.com

I have 4 REOs in escrow...two are for VA buyers - one in Oceanside and one in Vista - who had been looking for quite some time and had not been having success until we met. Since VA is 100% financing and the sale is subject to a VA inspection, many REO sellers/agents seem to be hesitant to take a risk on a VA offer....you will need to find a full-time agent who is willing to work very hard to find you a great deal. It's definitely doable....but it will take a lot of work and commitment on your part. Short sales.....only 11% of those available in SD county have actually closed in the past 6 months. Completing one with VA financing will be even more challenging because often times, the Sellers strip the place of all appliances before they move out and do not have the financial means to complete any repairs. Remember....you are dealing with a Seller who is in extreme financial distress, so there are no $$ available.

Mary Ann:

The answer changes based on the property. What you have to remember is that the "asking price" (AP) does not have to be even close to the "fair market price" (FMP). It can be greater or less than FMP and this will determine where to bid. Once you know the FMP then an offer 10% below that could be successful if, for instance, the home has been on the market for a over 30 days, there are 4 of 5 similar properties for sale in the area, there are 5 or ten homes in default in the area (either listed as short sales or just heading towards becoming REO's). With a short sale, the same basic market forces are at work, although much more slowly, as the average short sale approval cycle is 45 - 90 days.

The trick is to work with someone who knows your market and stays on top of homes that fit your parameters. I have known people who have picked up great deals (55 to 65 cents on the FMP) because they could look past a little bit of dirt and a some holes in the wall. Most people are looking for that "move in ready" home. Being willing to put in some elbow grease, paint, and / or flooring removes much of the competition and allows you to get a great deal. Dare to Dream.

Shel-lee Davis
Real Estate Consultant
RE/MAX Palos Verdes Realty

You got some great advice below, especially regarding the relative ease of purchasing an REO rather than trying to do a short sale. We've typically seen savings between 25-30% in your area on foreclosure home purchases, so bidding 10% (or in some cases, even 20%) below list price isn't unreasonable.

Two things to keep in mind:

First, it helps to know what you're asking for a discount FROM - in other words, what did the property last sell for...how much did the bank take it back for...what's the average price depreciation in the neighborhood...a Realtor can often help you come up with that information.

Second, it helps to know how much foreclosure activity there is in the area, and how long the property you're interested in has been on the bank's books. I just did a quick search on our site and found almost 700 foreclosure properties and almost 550 bank-owned homes in Chula Vista alone; that gives you tremendous negotiating leverage when dealing with the lenders.

Good luck!

Hi,

If you happen to look at condo's, townhouses or PUD's, make sure that it's VA approved.

Rob Chomentowski
Sr. Loan Officer
Affinity Financial
858-922-7899 http://www.affinity-financial.com
rob@affinity-financial.com

MaryAnn, I would highly recommend looking at REO's (bank owned foreclosed properties) rather than short sales. Short sales can be a nightmare and are very risky. No guarantees you'll even get the property, yet you are still required to do your due diligence i.e. conduct your home inspection, which will cost you, etc. I've been working with a lot of buyers looking for bank owned properties and we've written up a lot of offers. I don't know about your area, but here, the are going for asking price or over asking price. My clients have been quite discouraged. These properties are being priced very well so as to attract a lot of buyers and they are successful at it. I'm waiting for this buyer pool to dry up so that my buyers will have a chance to get something into escrow! And they are not making low offers - they are making at least asking price offers. Unfortunately the good ones go quickly. My guess is to bid 10% under asking won't fly - these properties are being agressively priced already since the banks are not in business to sell homes, they want to unload them as quickly as possible. Your market may be different?

Were you also aware that Bush signed a housing bill last week that aims to help first-time home buyers?
First-time home buyers can get up to $7,500 tax credit if you buy a home between April 9, 2008 and July 1, 2009. This is an attempt to stimulate home buying in what otherwise is considered a down market - basically means you get a 0% loan for 15 years! Definitely something to think about!
If I can offer any more help, let me know. By the way, where are you looking to buy? Let me know.
Thanks, Cynthia

CYNTHIA J. FLEMING, Realtor®
COLDWELL BANKER RESIDENTIAL BROKERAGE
Laguna Beach South
31582 Pacific Coast Highway
Laguna Beach, CA 92651

Business: 949-499-8791
Cellular: (603) 216-7906

Finding you a place to Love ... not just a place to Live!

Your chances of getting a property will be different with each one you bid on. In some cases it may even be prudent to bid more than 10% of the listing price. These are strange times, with a lot of distressed sellers out there. Every offer should be taken seriosly.

Good Luck