Glad you found the info helpful - you can also provide feedback for me by clicking on the "thumbs up" icon or "best answer" and it will log it to my account. :)
When the bank starts a foreclosure, it enables a 3rd party called the trustee to act on its behalf. The trustee will set a date for the foreclosure sale where anyone can come and bid on the property. This occurred back in November (assuming I have the right house). The trustee conducts an auction and by default they will have a minimum bid from the bank. If no-one bids or no-one bids higher than the minimum, the bank will get the home. Technically, the bank doesn't pay anything as they had already fronted the money for the original loan. They will however record a sales price which the bank sets as it's "loss" for the home. In this case, their number is $421,980. Many banks are taking large losses on their homes - this particular one is almost break even once you factor in closing costs. This was the price 5 months ago ... and from the sound of your original question, it doesn't seem like the bank has been keeping up on the landscaping / maintenance....
Did you know that there is a new build for sale for just over $300K in Seville? It has no pool & it is 400sf smaller, but its just barely over $300K. Anyways, the comps you have are partially correct. The home that sold for $361K was 400sf larger and it had a pool and a 4car garage and it does not back to Riggs Rd like yours does. It also sold for about $75/sf, which means you have a case to make to buy your's for around $330K. However, the other comps make this house valued around $475K. So, no matter what you do, you'll probably get a good deal. Just make certain that you present accurate comp info to the seller's agent and tell him/her that you are concerned with the appraised value. Even though you are paying cash, you can still make the offer contingent upon an appraisal that is acceptable to you.
Access to this information and the interpretive analysis of it is why it is extremely important to be working with an experienced, full-time Buyer's Agent, and not the listing agent or a listing / seller's agent who "moonlights" as a Buyer's Agent.
Buyer's Agent Realtor
I think many buyers are surprised at how difficult it can be to negotiate with a bank. What seems logical and reasonable to the rest of us is simply not how the banks operate. Unlike a regular Seller who might be motiviated by emotions when considering your offer, banks are black and white. There are strict guidelines from the investors based on the bottom line of what they will net from the sale. And these guidelines are administered by a third party to further take emotions out of the decision making process.
Your best chance for success is to take the emotion out of your negotiations and stick to the facts. Work with your realtor to get a market value that you can trust. Base your offer/counter offer on what the home is actually worth. I noticed that most of the recent sales near the home you are bidding on are selling well above $100/ft and your offer is well below that number. The house has been on the market a little over two months, but that is still below the average of 4 months. It might be hard for the bank to justify the lower price. Even though the Trustee Sale price was around $421K, the original note was for $637K. The bank has already taken a loss of over $200K.
If the house is priced right, then don't expect the bank to reduce the price - they may eventually lower it, but someone else may come and match their offer while you are waiting for that day to come. If the bank has priced the home too high and is not willing to take a fair market offer, then move on to the next house. As much as you like this house, there is always another perfect house out there!
Getting the home for 400K seems possible...assuming someone else doesn't come in with a higher bid :) But ultimately it will be the banks decision. Based on your info, I believe you're looking at a home in Seville and there are some recent comps of homes from the same builder in that subdivision over 4000 sq ft which sold for as low as $74.88 per square foot (w/o pool) and one pending at $93.17 (with pool) and the offer is likely less. There's also an active listing at $77.78 per sq ft of a home from another builder. If you used these numbers, then the home you like would be somewhere from $331-411K, which is higher than what the bank has countered. If you decide to counter, I'd recommend that you have your agent pull some data on these to help show why your offer is reasonable.
If the bank isn't willing to negotiate, you also can wait and see if they lower the price to your range ... based on their history, they are lowering the price every 2-4 weeks ... so if they don't have any other buyers, it will likely be in your price range within a month or so. Also, ask your agent what the trustee sales price was - I saw it and I think you'll be surprised.
Designing, presenting and negotiating an offer is not as easy as many people thing. You need to know how the market is behaving in the area, the comparables and how the differ from the subject property, days on the market, price history and who is the seller (Freddie Mac, etc...) among many other things.
Many of us are very familiar with the Gilbert area and the current foreclosure market, but without having more information it is impossible to give you good advice. Giving advice with just a partial picture will be doing you a disservice.
Trust your agent, she should know what to do. If there is not enough confidence with her service, talk to her.
You deserve the best representation you can get.
ABR - Accredited Buyer Representative
Higher earnest deposits are expected on cash transactions. However, I'd try to cap it at $5,000, but $10K deposit is not abnormal for that purchase price range. Your agent should know what needs to be sumitted with the offer to "plead your case." But since you are asking for guidance here on Trulia.com, it makes me wonder if you are really receiving all the information that you need to make good decisons along with the interpretive analysis of it. However, it's not pleading your case that's going to help you. It's presenting facts & information to the seller that counts.
Buyer's Agent Realtor
Consult with your Buyer's Agent. I hope you are not using the listing agent as your agent. You need an experienced, full-time Buyer's Agent specialist to help you.
That being said, I disagree with most of the other responses, besides the fact that you need an experienced, full-time Buyer's Agent specialist to assist you. When it comes to negotiations on REO's, the 1st counter offer from the seller will usually be very close to the listed price. So, don't be concerned about that. I think your next counter should be $380K and then stick to your guns and don't go above $400K. REO sellers want to see some "effort" on the buyer's part to see how interested they really are or if they are just looking for a steal or do they really want the home. So, hit them back with another counter at $380K and go from there. You'll be surprised at either an acceptance or another good counter offer from the REO seller.
Also, are you aware that the seller will not turn on the water or gas for your inspections for the house you want to buy? So, make certain that you have ample time for your inspections (10-15 days). You can certainly activate them in your name for your inspections but what if there is a water leak in the pipes in the walls & you can see it until you turn the water on & now you just created a leak and a big mess that you are financially responsible for? BE CAREFUL and make certain that you have an experienced, full-time Buyer's Agent Realtor assisting you.
Buyer's Agent Realtor
Good luck and like he stated - it is most important that you find a Realtor who knows the market and the values for the area
Serving Valleywide Realty
Direct - (480) 205-1151
The bank's counter makes it sound like they think you are way off with your offer. A small concession like that is usually a way of saying, we're willing to negotiate but you need to come closer to the number. Some banks will give place away, others will try to stick to the BPO (Broker Price Opinion) as much as possible. It all depends on the bank. Also, whenever their is a price reduction, interest in the property is usually heightened. Just like you came in after a price reduction the bank know others may too. If the place isn't a must have for you I'd wait a week or two before countering and hope no offers come in. By that time the bank should know their pricing still isn't working. If you really like the place, plan on calling it home for years to come, and would kick yourself if you missed out on it, be aggressive and go straight to the $400,000 as a highest and best offer.
RE/MAX Gold Coast Realty
56 Newark Street
Hoboken, NJ 07030
Direct: 201 795-5200 x340
Office: 201 795-0100
Fax: 201 795-1245