Foreclosure in New York>Question Details

Petra, Home Buyer in Mahopac, NY

Buying an REO house how much negotiation?

Asked by Petra, Mahopac, NY Mon Oct 13, 2008

I would like to ask for some advice. I would like to start the negotiation on a house that is listed for sale. It is bank owned and currently selling for $208,000. I know it has been on the market for 6 months and last sold for $287,000. The house needs major work such as new heating and plumbing and it also has major water damage in the basement I believe the pipes burst (mold everywhere in the basement). Main level seems to be fine except that it needs floors and appliances. Where should I begin my negotioation and what do you think would be too much to pay for this house. I am estimating 50k in repairs.

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Thank you both for the advice. The house is about 850 square feet (with a walkout basement which I don't think is included in the square footage), 2bd, 1bth. I would say comparable houses in this area go from $260,000 to $300,000. I can't afford anything above $240,000 (which includes the money to fix it, as we are getting a rehab loan). I just don't want to drown.
0 votes Thank Flag Link Mon Oct 13, 2008
Petra
I think that your offer should be based on the market price for similar homes in the area. When I am working with a buyer we conduct a CMA on any home that we make an offer. The CMA should reflect approximately the same value as the list price. If there is a discrepancy, then that is when you need to go to work.

For example, if this is a three bedroom two bath house, 1600 s/f, look at the other 3/2s on the market in comparable condition. Then figure out what market value is. it is likely that the price offered takes into account the condition of the property. Your Realtor's job is to make the case for your offer.

Correctly done the offer, with supporting documents, should help the lender agree with your offer. Does not always work that way...
0 votes Thank Flag Link Mon Oct 13, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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