Home Buying in 33068>Question Details

Capragal, Home Buyer in Coconut Creek, FL

What should you offer on a foreclosure? Should your agent run the comps and offer the comp amount even if it's higher than what the bank is?

Asked by Capragal, Coconut Creek, FL Mon Jun 4, 2012

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Bank owned homes, which is what you sound like you are making offers on and not ones in foreclosure, are hot properties. The bank sets a price that is usually competitive and they wait to see what offers they get. Often buyers have been out offered on other homes they lost to higher offers and so this time they are going to make a GOOD offer which is often over listed price. The bank just sits back and lets the offers roll in and then they ask everyone to make their highest and best offer hoping they all offer more. It's a bidding war and the bank is good a playing it. You can often get a good deal by buying these bank owned homes but you can often get as good a deal and a better home by buying a regular resale home owned by someone taking good care of it, so don't fixate on just bank owned or short sale homes.
1 vote Thank Flag Link Mon Jun 4, 2012
With the inventory as low as it is nowadays, most likely the REO (Real Estate Owned = Foreclosures)
will sell at above asking price. Bedside, the banks will list at market value price ( based on a professional appraisal) anyway.
Best advice I can give you: make your HIGHEST & BEST offer with the largest escrow funds you can from the get go; this way, if you lose out to a higher offer you will need kick yourself, because had you know, you were willing to pay the higher price.......
0 votes Thank Flag Link Wed Sep 19, 2012
Heck no!!!!

You just need to present your offer from a position of strength with a Pre-Approval Letter and an Escrow Letter for as much as possible, even if you don’t plan to put that much down on the loan, at least the bank can see you have it if needed to close!

As a Real Estate Investor and owner of a Mortgage Company who is still standing after the past 8 yrs who has been involved with thousands of offers over the years, here is what I’d do…

Example: $400,000 list price on the foreclosure

I’d do a 95% NO PMI purchase loan, but I’d submit an Escrow Letter showing 20% (if you have it) at the $400, (if you are worried offering less won’t work)

I’d send my offer at a 95% LTV conventional loan with the Escrow letter and Pre Approval letter thru one of my Realtor Partners who would give me a Buyer’s Agent Credit of up to $8,000 to pay my closing costs!

BTW- My realtor partners offer these kinds of Buyer’s Agents Credits for my buyer Referrals to them.

Click here to read why: http://www.trulia.com/blog/steve_31/2012/05/why_why_would_a_…

Click here to see loan programs: http://www.pro-option.com

Steve McRory
Pro Option Mortgage
steve@pro-option.com
Ph: 888 662 4404
0 votes Thank Flag Link Tue Jun 5, 2012
Yes, all real estate right now is being sold at the market value. You may want to stay away from foreclosures as they are being bid up by the highest and best policy that banks use above the market value when you consider that work that needs to be done. I'd find the best remodeled home in your price range and buy that one, 15 year mortgage rates are below 3 percent so you are buying someone elses improvements at historically low mortgage rates without having to come out of pocket for them!
0 votes Thank Flag Link Tue Jun 5, 2012
I am in the process of closing on a foreclosure. I'm representing the buyers. I gave my buyers comps for the neighborhood and based on the comps they made an over slightly above the list price. Within a few days, the listing agent sent me an email indicating that multiple offers were made and that my buyers should make their highest and best offer. As a result of their offer and terms, they are getting the house for $16k above the list price, which is still substantially lower than the comps. With foreclosures, you may not get an opportunity to make a higher offer so make an offer that is reasonable and within the comps' range. Good luck.

Sincerely,
Nicole Marks Mason, Realtor
http://www.buysellboca.com
561-445-8743
0 votes Thank Flag Link Mon Jun 4, 2012
Dear Capragal,

That totally depends on the property so it is imperative you are dealing with an agent who can properly advise you on the metrics surrounding that particular deal. You will see properties that sell at, or below, list price and those that sell far above list price with multiple offers. Do your due diligence and offer what you feel the property is worth to you.

The very best of luck to you and I hope this information is helpful but if you need anything additional please do not hesitate to give me a call.



Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com -
0 votes Thank Flag Link Mon Jun 4, 2012
Well I could put this house to rest. The bedroom is 13 x 10 and our furniture won't fit! Our bedroom in our apartment is 16 x 14. It the bedroom in the house was 13 x 13 we would have just made it! On to the next house....
0 votes Thank Flag Link Mon Jun 4, 2012
You mention that you find it unusual for people to go above list price. Honestly, I have not seen a foreclosure or a short sale that was in a good neighborhood that was priced under $200k sell for below asking price in several months. In fact, these days if you are not a cash buyer, good chance you are going to be out of the game on the foreclosures. Even the cash buyers are going above list these days.
0 votes Thank Flag Link Mon Jun 4, 2012
Well I was told there are some offers above the listing price so if I make an offer I know it must be above 130000. The home is nice. Honestly its not all that but for the price and being that's its not far from where we live [currently live in apt] its a good deal. I already know the comps are 138000 with no pool. My agent feels I should offer 145000 but that's too high to me. The house is small to. I guess I need to see what hubby wants to do!
0 votes Thank Flag Link Mon Jun 4, 2012
have your agent run the comps. I wouldn't advise going over the asking price unless there are multiple offers and you really like it.
0 votes Thank Flag Link Mon Jun 4, 2012
We have a home we are interested in. The asking price is $130,000 however we were told the comps are $138,000 (with no pool). The home we are interested in does have a pool. Apparently the listing agent has several offers on this home, some of which are ABOVE the listing price. I never heard of anything like that.

We also looked at another foreclosed home which was listed at $184,000 and we placed a bid of $175,000. I was not told when I made an offer on that home that we needed to go above the asking price. I am guessing since my realtor already knows that 180,000 is my max.
0 votes Thank Flag Link Mon Jun 4, 2012
First, you have to understand the LISTING PRICE idea:

Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.

Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.

If your objective is to buy the property, then you want to make all the correct steps.

Good luck and may God bless
0 votes Thank Flag Link Mon Jun 4, 2012
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