Clyde,
There are so many variables. There are likely other liens against the property that may need to be settled. It is in your best interest to work with an agent to work this deal. To get the best deal work with an agent. Jo Shaner's team is great to work with.

Hello Clyde,

The figure that a house is foreclosed on has nothing to do with the value or the acceptance price. In fact, the figure can be misleading, since a true picture is not usually shown.

Example, if this property had a second mortgage on it and most of the foreclosures recently.....that is the case (80/20=100% loan) - what you are seeing is only one of the loans showing up as the mortgage loan amount. Hence, the consumer then believes that that was the only loan amount that was foreclosed on. Now, let's get real......if a homeowner had that much equity - don't you think they would have sold at a huge discount instead of letting it go into foreclosure??

My team has represented one of the largest banks in the country for their foreclosures for over 10 years. What your mind set is, is NOT uncommon.

The logical thing for you to do, is hire you a reputable Realtor experienced in foreclosures AND IN THE AREA you are wanting to purchase in. Have them tour the house with you, then do a "comparable market analysis". Then you will have the knowledge of what is going to be a reasonable offer. The agent will also know the best path for you to negotiate a stellar deal.

Contrary to most folks beliefs, if the house is priced correctly....it will not hang around long. My last 7 deals this month - all were multiple offer situations.

Happy house hunting and I wish you the deal of the century!

Jo Shaner
Lipsey/Shaner Team LLC
Keller Williams Realty

You left out just one little itty, bitty detail. Just a minor issue, of course, but one that's kind of important.

How much is the house currently worth?

Let's look at the numbers you provided:

Price: $179,900. Maybe the bank is expecting to sell somewhere in this range. If it doesn't sell for that price, the bank will drop the price, just like any seller.

Loan Amount: $128,000. Nearly meaningless. If the bank wants to sell the house, so what? On the other hand, with a foreclosure the bank's investment is substantially higher than the loan amount when you add in the legal fees.

Appraisal: $231,000. A real appraisal? For a sale? Very weak number. And there are a lot of worthless appraisals that were done for refinancing purposes. If you mean the tax assessment, that's also a totally worthless, meaningless number. Tax assessments are in theory supposed to reflect the value of property for taxation purposes. They don't. And home values change.

So, with that behind us, what's the darn house worth? That's the question. If it's worth $150,000, then you offer $150,000 or less. If it's worth $110,000, you offer $110,000 or less. If it's worth $231,000, you can offer something between $179,900 and $231,000. Do you see a pattern here? You offer only what the house is worth, and perhaps less.

Consider: If the house is worth $150,000 and you make a successful offer at $175,000--congratulations! You just overpaid by $25,000.

The only way to do it right is to work with a good Realtor to determine the real value of the house. Then, and only then, make an offer.

Clyde,

This is a common question and there is NOT a standard answer, there is not a magic formula. So much is dependent on the property itself, the location, the condition, the days on market, the other properties around it that are for sale as well as recent sales in the area. I suggest that you ask a Realtors to assist you in answering this questions. This is your best chance for success.

Gerald Williams
Affiliate Broker
Mortgage Loan Officer
BenchMark Realtors, LLC
BenchMark Mortgage, LLC
901-413-2233
gh_williams@yahoo.com

Hi Clyde,

The bank will be looking at the prices associated with recently sold similar homes located in the same area as your subject home to support their decision.

Our recommendation is that you use this same information to arrive at a number range that will include both your initial and top offers. If you can't identify comps that support an offer below the banks "asking price" you might want to consider numbers in their "asking range."

Best wishes,
The Eckler Team