Home Buying in 07060>Question Details

Janice Blount, Home Buyer in Plainfield, NJ

if I see a home that I am interested in however the price is more then I am willing to pay and the property is bank owned how much will the bank

Asked by Janice Blount, Plainfield, NJ Mon Mar 8, 2010

usually go down on the price?

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Keep in mind that not all bank foreclosures are priced aggressively, but most are. The banks strategy used to be to price high and drop every 30 days until an offer comes along. Their current strategy of pricing aggressively tends to result in multiple offers witin a week. This is a generalization so you'll need to reply on your realtor's guidance in terms of offer price guidance.
1 vote Thank Flag Link Mon Mar 8, 2010
Janice,

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.
1 vote Thank Flag Link Mon Mar 8, 2010
Janice

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

Tim Robbins
Exlcusive Buyers Broker
Bettter Homes Realty
800-610-3599
Web Reference: http://njbuyersonestop.com
1 vote Thank Flag Link Mon Mar 8, 2010
Thank you all for you advice. As a first time home buyer I am trying to consider all that comes with a mortgage, and am trying to stay on a set budget. I will speak to a realtor and inquire more about this property. Again Thanks!

Janice
1 vote Thank Flag Link Mon Mar 8, 2010
I agree with Alma. Once a property has been foreclosed, it has gone thru quite a journey and the bank has sent out appraisers and agents to value the property. This can be accomplished by taking the property at auction if the bids by buyers don't meet the banks threshold, or by the bank just taking property direct and no auction. For this reason, most foreclosure properties are listed with no or little wiggle room. But it is not to say that some banks are willing to offer a certain percentage off the list if they carry the property for a long period of time. The longer they carry it, the more they spend.
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
0 votes Thank Flag Link Mon Mar 8, 2010
The advice I give my buyers of bank owned properties is to go in at asking price. As has been stated by Alma, these properties usually bring in multiple offers. If the home is in a state of pre-foreclosure and is not owned by the bank, it's a totally different ballgame.
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.
Good luck.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Mon Mar 8, 2010
I have heard of and seen a wide range here. The banks are looking for sure things and quick closes. The fewer the contingencies you have the lower the price should be. Dont worry about insulting and offer what you think it is worth. Have your attorney put an appraisal clause in even if you are a cash buyer then get a second opinion from appraiser.
good luck
0 votes Thank Flag Link Mon Mar 8, 2010
Hi Janice,

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.
Roxanne Wojdalski
cell 732-910-5835
office 973-772-9404
e-mail roxanne.wojdalski@century21.com
0 votes Thank Flag Link Mon Mar 8, 2010
Unfortunately there are no standards as to percentages off--you need to be aware of recently sold similar properties in the area, factor in repairs--extensive or cosmetic--review the data and make a determination as to a fair offer. Is the property priced on target or slightly below today's market--if so multiple bids could come into play--keep in mind that banks are looking to get as much money back as possible--what is your agent advising...
0 votes Thank Flag Link Mon Mar 8, 2010
Hi Janice,

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.

Good luck!
0 votes Thank Flag Link Mon Mar 8, 2010
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