Home Buying in Los Angeles>Question Details

Matias Cardi…, Home Buyer in Los Angeles, CA

Negotiate price on a home, 0% down and have them pay the closing costs on Bank Own

Asked by Matias Cardiel, Los Angeles, CA Mon Jun 16, 2008

Is it possible to negotiate the price on a home, go in 0% down and have them pay the closing costs on a bankowned property? or is this wishful thinking?

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Hopefully some of the previous answers aren't discouraging you. I personally find some of them laughable, because you CAN absolutely negotiate on a bank owned home - our realtor knew that and that's just what we did. It took a long time (about 5 months from when we first made the offer) and it may be sold "as is" but that doesn't mean you can't negotiate pricing and terms. As I said earlier we negotiated all of our closing costs, + $9000 off asking price. We closed on our home in July. As far as the 0% down that may be tougher and is totally based on the bank and your credit. We received information from some banks stating we had to have 10% minimum, but were able to find one that would finance a 30 year conventional with only 5% down. Good Luck.
0 votes Thank Flag Link Tue Sep 23, 2008
Agree with Keith - I guess your question is three months old, which seems to be a century old by today's mortgage industry standard.

Don't know where you can get a 0% down and closing costs paid on bank owned property, but never say never, maybe a mortgage genius will whip that out of the bottle.
0 votes Thank Flag Link Mon Sep 22, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
Welcome to Fantasy Island. Maybe in Fargo, but not in any market I am aware of.
Are you aware that there was a mortgage meltdown?
0 votes Thank Flag Link Mon Sep 22, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
Bank owned property is difficult with regards to buyer demands. I have not worked with ANY banks who would consider any of these types of terms. As a matter of fact..they normally sell the property they own "As-Is"
0 votes Thank Flag Link Mon Sep 22, 2008
Extremely unlikely. Why do you think the banks own this property? Best of luck.
0 votes Thank Flag Link Sun Jul 6, 2008
Most bank-owned properties I've shown and/or sold have required a minimum of 10% down.

It sounds like a good idea, but banks are a little scared right now. Have you thought about a downpayment assistance program?
Web Reference: http://www.DotChance.com
0 votes Thank Flag Link Tue Jun 17, 2008
The bank just as any seller would and should be more concern about the bottom line regardless of where the money comes from so it is doable. Remember you still need to put a deposit though.

If you need that type of financing structure then feel free to contact me and good luck to you.
0 votes Thank Flag Link Tue Jun 17, 2008
Zero down may not be possible as the bank would want to recoup some of their loss.

A part of the closing costs can be negotiated. It is rare that the bank will pay for all of it.

Each lender is different. Select a real estate professional who knows how to ask the right questions so that a win win transaction can close to the satifaction of all parties.

Remember that banks are not people and have established policies and procedures which often times make not sense to people.

Best of luck!
0 votes Thank Flag Link Tue Jun 17, 2008
Matias, I can't speak for the 0% down, but we are purchasing a bank owned home with 5% down, and we negotiated almost $9000 off the list price, along with 3% towards closing.
Good luck.
0 votes Thank Flag Link Tue Jun 17, 2008
Matias why are you asking? Has anyone offered you 0 down? If no one has offered you 0 down, it is because in this market 0 down does not exist. Now I am not saying it isn't possible. I have a client who is going through the VA and has 0 down, but that's a "special program". There are many programs out there that can help you purchase a home with no money down, but it isn't a loan program. And if you want these types of programs, the banks have to agree to them and many don't. You need to be really careful, don't try to get too much out of this bad market, because sometimes it doesn't work in your favor especially if you have an agent who doesn't know what he/she is doing. Now as far as the closing costs, ask away, they usually will give them to you. When it comes to price, that is negotiable 100%. The bank wants the property gone, you want the property, now negotiate. Good Luck!!
0 votes Thank Flag Link Tue Jun 17, 2008
Don't let anyone kid you, in this environment, it is wishful thinking.

Dennis Leffert, J.D.
Lic Real Estate Broker
0 votes Thank Flag Link Tue Jun 17, 2008
Right now everything is possible. Yes you can negotiate on bank owned homes and get a 0% down home loan as well as help with closing cost on REO'S and Short-sales. I work alot with transactions. like this. We just have to structure the offer the right way. I can help and explain how we can make this work. There are many different guidelines you can possibilty fit into . If you have assets checking, 401k showing money that can help you as well. Also have you owned a home in the past wither way there are programs out there for you. Call me or e-mail me for more info.
0 votes Thank Flag Link Tue Jun 17, 2008
It is possible. You will first need to make sure you can qualify for 100% financing which can be quite a challenge these days. The most common 100% financing today is an FHA loan coupled with one of the down payment assistance programs like Ameridream or Nehemiah. If you choose FHA financing, the property's price will need to be within the FHA maximum price limits for your state. FHA is for owner-occupied homes so you can not be an investor. Although most banks that own property (known as REO)are only concerned with their bottom line (net), they sometimes have internal policies that limit the amount they will pay towards your closing costs and/or towards your down payment assistance.
0 votes Thank Flag Link Mon Jun 16, 2008
In this market it is not impossible to get this type of deal, but approaching it fast. As a first time buyer you may be able to take advantage of State, County, and City programs that can help to cover closing costs. You can put as little as 3% down if you are a first time buyer and can have that 3% credited from the seller.

So the answer is yes, it is possible. The real questions is how likely is it. You need to speak to your Realtor and mortgage professional. They should be able to help you find a program that can work for you.

If you are not a first time buyer, then you will have a much harder time putting down anything less than 10%. Keep in mind that with many programs not owning a home for the last 3 years is considered a first time buyer.

Good Luck,

Feel free to contact me if you need any other info.

Web Reference: http://www.charityar.com
0 votes Thank Flag Link Mon Jun 16, 2008
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