If the property is more than what you are willing to pay, you may have a problem. Foreclosed homes are priced at or slighty below market value so that they sell quickly. Of course, this is not always the case, but I agree with Alma and Diane as knowing what part of the foreclosure process the property is in will help you determine how you should proceed. Please note: Most homes will sell for what the market will bare at that specific given time; if there are more buyers in the market for the same property, prices will go up.
Before making your offer on the property, visit the property with a Realtor of your choice so that your agent can research comparable sales and consider the condition of the property as well.
Depending on condition, the property may not qualify for a conventional loan or FHA loan. You may have to buy through FHA203k (Loan + Home Inprovement Costs).
I know your question was about the "percentage" the banks discount homes. The truth is, some properties are reflective of their condition and not truly discounted. Just my thoughts. I hope it helps.
As I have read the answers I beg to differ with some of them when buying a foreclosure or a short sale it all comes down to a few things. First and foremost is to make sure that the Buyer has a mortgage approval in place that is subject to finding a home and appraisal. By doing this you are now a serios buyers to the bank.
If the Buyers agent knows what they are doing they should be able to put together a complete package to present to the bank that shows them the bottom line including and updated BPO or brokers opinion and the longer the home is out on the market the more then are willng to make a deal. Remember they need to clear their books of the property in order collect on any mortgage insurance they maybe able to collect on.
So this is what you should do when looking at foreclosures
1. Get your Money in place!
2. Have more then one property that you are interested remember a foreclosure is not always the best deal.
3. Have and agent or Broker that is working totally working with your best interest.
4. Make sure that your offer make sense in dollars and contingencies.
5. Do you own due diligence and work with a agents who is willing to work for you and not working for the seller.
Nothing against agents but if they are working as the listing agent they are working for the seller and their job is to do the best for the seller even if the Seller is a bank
Exlcusive Buyers Broker
Bettter Homes Realty
The simple answer to you question, which is a good question, is that there is not only one lock, stock and barrel strategy to foreclosed properties.
Sean Farley, Terrie O'Connor Realtors 201-286-7206
Make sure you know which state of foreclosure the property is in and find yourself an agent who is experienced in doing short sale and foreclosures. NAR now has a course/designation certifying agents who have gone through it.
The answer is absolutely. Eventhough bank owned properties are already low priced you can bid lower and have the offer accepted if there are no other higher bids. My office specializes in bank owned properties and we see this happen all the time. Sometimes there are bids that are higher that are higher than the asking price, yes but most of the time there is not. Please let me know if you would like more explanation to buying a bank owned property and what it entails I would be happy to help you.
Thank you and have a great day.
Normally banks price the property well below value and receive multiple offers above the asking price.
Of course there are some Asset Managers that overprice.
Is it truly owned by the bank and not a pre-foreclosure short sale?
Find a local Realtor to help you asap and she can give you information about recent sales of similar properties so you can submit a viable offer. Make sure your offer has a preapproval from a well known lender like Wells Fargo, http://www.ThirdFederal.com. You shouldn't have to pay an application fee so if the lender asks you for money upfront, go on to the next lender.