Home Buying in 33160>Question Details

Amy Lagarenne, Home Buyer in Easton, PA

when a home is in forecloser, can the buyer still negotiate the price down?

Asked by Amy Lagarenne, Easton, PA Sun Jul 15, 2012

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When buying an REO I have found it depends on the market and the time on the market. I just completed a buy for my client on an REO in Poway that was originally listed at $439,000 and we obtianed the property for $419,450. However, I have also seen resently multiple over asking price for REO's. There is much lower inventory levels right now and this is pushing the prices up.
0 votes Thank Flag Link Tue Aug 7, 2012
Hello Amy,

This very much depends on the area where you are buying, how long the property has been on the market and if there are any serious issues with the property.

While there are still areas where prices are either stable or coming down, in many areas of South Florida the market turned corner and prices are going up, up and up.

So, if the area didn't recover yet, and the house is "bad" (it has major issues like toxic mold, Chinese drywall, water coming through foundation) - you can negotiate the price down.
If the property is priced low or near market - the chances are you'll have some competition and the prices will be above asking and often near market price.

If you don't care much about losing the property, go ahead and present a lower offer.

I noticed a new recent trend - lenders are holding properties back if the asking price only generated one offer. Shortage of inventory is not helping the buyers either.

Hope this helps,

IrinaKaran
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes Thank Flag Link Tue Aug 7, 2012
Timing is everything .... the main answer is yes but only people that have knowledge on how to negotiate with the bank will be successful.

Call me to discuss details.

Thomas Pludwinski
Cell: 305 968 2932 -Miami
email homesthomas@yahoo.com
skype: thomasplud
web: http://www.homesthomas.com
Elite International Realty
16137 Biscayne Blvd.
Aventura, Florida 33160
0 votes Thank Flag Link Mon Jul 16, 2012
Amy,
Just as Miriam stated, "Everything is negotiable."

However, one really needs to ask a complete question such as, "If I try to negotiate the price down on a bank owned property, will I win the bidding war?"

Now, there are many ways this scenario plays out. Much of it depends on who or what bank owns the property. Each has their own set of published rules and guidelines. Skilled negotiators know which rules can be bent and which ones to avoid.

If you low ball at the beginning, you will lose. If, however, your strategy identifies if and where the negotiation opportunities exist, your chances improve.

Last week I prevailed in a $14,000 acquisition of a single family home that can be rented next week. It pays to have good representation. Everything is possible if you start right, don't make it emotional, and don't blink.

Best of success to you,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL
727.420. 4041 -
Chat with me on:
http://www.RealEstateMadeEZ.us
0 votes Thank Flag Link Mon Jul 16, 2012
Amy,

When it comes to real estate everything is negotiable. Prices are set as a base or starting point, but sometimes a property needs a lot of repairs and the bank that foreclosed on it will negotiate additional discounts.

In today's market however, there are more buyers than sellers and in many cases if the property is a good deal, buyers will have to make their highest and best offer in order to get it accepted.

If you need additional information, please feel free to contact me at (786) 290-9090 or miriamreo@gmail..com

Miriam Mizrahi
Beachfront Realty
(786) 290-9090
miriamreo@gmail.com
0 votes Thank Flag Link Sun Jul 15, 2012
First, look at LISTING PRICE:

LISTING PRICE
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.

Next;
To accurately answer your question, (if it hasn't already been answered),
If a house is "IN FORECLOSURE", it would be a SHORTSALE. In this case too; you would need a Realtor to help you.
0 votes Thank Flag Link Sun Jul 15, 2012
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