Foreclosure in 91752>Question Details

Roxy Morales, Home Buyer in Los Angeles, CA

How much should I offer on a 2004 bank owned home? My agent suggested the asking price. Please advise.

Asked by Roxy Morales, Los Angeles, CA Thu Dec 6, 2007

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Roxy, The first thing is that you must trust your agent. By asking this question, you may have doubts about your choice. If you can not trust your agent, their judgement, experience and advise....you need another agent. If you do trust your choice, let them be your guide and do trust your instincts. I don't think you have a simple answer here and you can not rely on "comps" when buying in this market as the MLS data is inaccurate at best and county recorder's offices are still backlogged and taking months to update sale data. If using true comp data from actual recordings, you will still be utilizing data that is a few months old and not a true picture in a downward trend. If you are buying as your primary residence and plan on staying put for more than 5 years, a small miscalculation wont be cause for too much concern. If this is a investment for you, I would recommend, based on this question alone, that you choose another investment vehicle.

In a neighborhood where few homes are on the market and foreclosure is rare, you may have to pay near asking. If in an area with a high percentage of recent N.O.D. filings and many on market, paying asking price may not be the best price. Again, if this will be your home for many years....choose a home you love and buy at a price your agent, the market, your finances and your gut says is good. REO's typically are set at a price with 5-15% "wiggle room" to allow for closing costs, additional repair items etc. BUT, in some area, there is much competition for homes, even in this market. If you are in one of those areas, the banks price may be the price you have to pay...or even more.
1 vote Thank Flag Link Fri Dec 7, 2007
Get your agent to run comps of recent solds of comparable properties...then make an offer on what you are comfortable with. Your gut feeling first, agent suggestion second
Web Reference: http://iansellsnola.com
1 vote Thank Flag Link Thu Dec 6, 2007
Roxy

Different lenders have different parameters on what they can take for a property at any given time.

Generally the longer they hold the property, the more flexible they are in negotiation of price.

Since lenders use realtors for the disposition of their REO property, have your realtor go into the recently sold properties in the MLS to determine:
List price vs Sold price on that lender's REO's.
Time on market (DOM)
Type of loan buyer used (if you see FHA or VA financing you can estimate seller
probably paid 4% of purchase price toward buyer's closing costs

With some properties, the buyers ask the seller to pay buyer closing costs (which in itself is an offer less than list price).

Once you see a recent list of properties sold, list vs sold price, DOM, terms, for that lender, you will know how flexible they may be to receive your offer.

If you are not in a multiple bidding situation, go in a little lower than your research indicates, the lenders always counter an offer.

If you are in a bidding situation, go in with your highest and best, i.e. a bid that if you found out you lost the bid by $1 you would not be dissapointed

Best of luck in your purchase
1 vote Thank Flag Link Thu Dec 6, 2007
Hi Roxy, Your agent has all the information required to best advise you on your offer. Was this home built in 2004? What are the recent sales prices ( closed sales ) of properties with similiar features?..and what are the selling price trends? These questions and a whole host of others will help you determine a reasonable offer bank owned or otherwise. Bank owned does not always translate into "the best deal".

Michael
http://www.MichaelRobertsHomes.com
1 vote Thank Flag Link Thu Dec 6, 2007
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