Home Buying in Madison>Question Details

Amy, Home Buyer in Madison, WI

1) What's a reasonable offer on an REO? 2) How likely is it that my school will be redistricted?

Asked by Amy, Madison, WI Sat Apr 28, 2012

In the current market, how low of an offer will still be likely to be accepted? We are looking at an REO that's $189,900 and want to offer $180,000. Will they counter, or just reject our offer?

Also, the house is in Madison 53719, but is districted for Middleton Schools, which is ideal for us. How likely is it that we will be redistricted out before my son reaches school age (3 years from now)? We want our kids to go to the Middleton School District - can I appeal to be grandfathered in if it changes anytime soon?

Thanks!
Amy

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Answers

5
Definitely do your market research and see what comparable homes are selling for. Often if a bank is pricing an REO at full market value you can negotiate with them and $10,000 below asking price would be reasonable in that case.

However, The last 3 REO's we have worked with were aggressively priced. They all counter offered at full asking price, generated multiple offers, and went for above asking price. So, if this property you are considering is one that is priced very well, be prepared for this.

Also, I'd suggest working with a buyers agent who has some experience with foreclosures. REO's can be a challenge at times, and a good agent can help you work through the process and get the best deal. Good luck.
Web Reference: http://keithandkinsey.com
1 vote Thank Flag Link Sat Apr 28, 2012
There are many factors that play into the offer of an REO, if you are looking to get the lowest price consider these things as well:
1) Financing Terms--Banks Love Cash
2) Closing Date--Sooner the better
3) Inspections and Testing--If you can omit as many of these as possible the bank will be more likely to work with your offer
4) Earnest Money--Banks like to see high earnest money--10% although high, seems to be a significant tipping point for some banks.

Although you might not be able/comfortable to do all these things, try to stretch yourself as much as you can towards them, REO's are competitive, doing as much of these things will increase your chances.

As far as School District Changes, I agree with Michelle, call the School District to see if there are any future plans to make changes, beyond that there is always some risk, but this conversation will minimize it.
0 votes Thank Flag Link Tue Jul 3, 2012
These questions are all ones you should be discussing with a Realtor who you have personally chose as a trusted and knowledgeable resource because every situation is different. IF you do not have one right now, that should be your first task ie to find one. That is their job. Get a reference, call one of these fine agents below, (or more than one till you find one you can work with).

Best regards, Guy
0 votes Thank Flag Link Mon Apr 30, 2012
Doing a comparable market analysis is the best way to determine an appropriate offering price. When buying a REO property you need to have patience and be very flexible about a moving and closing date. Banks can and often do take a long time responding to offers. In regards to the school district issue I would call Middleton Schools 608-829-9000 directly to ask if there has been any discussion of changing the school district boundaries. I keep a close eye on education issues because it is so important to buyers. I am unaware of any public discussion of changing the boundaries. Let me know if you have other questions. Good Luck!
0 votes Thank Flag Link Sat Apr 28, 2012
Hi Amy, The price you offer for a REO home depends on a number of things - the location, quality of the home, size, how long it has been on the market, etc. I like to do a Comparative Market Survey. That gives us homes of similiar size, etc. that are comparable to the REO. That should show you the value when it is in good repair. I don't know if there is any way to determine if the school district will be redirected. A call to the city of Middleton planning and zoning may be a good start.
If you are not working with a Realtor, I would love to work with you and answer all your concerns,
feel free to call or email me. Regards, Judy Braund, Keller Williams, 608-235-0431
0 votes Thank Flag Link Sat Apr 28, 2012
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