The lawyers and lenders handling a foreclosure have paperwork facts in front of them about a specific home. If those facts are not correct, you and your agent need to include proof of why you are offering less for the property. If you simply submit an offer for 20 or 30 thousand less than the homes asking price and do not include proof the home needs these additional repairs, or that similar foreclosures sold for 20 to 30 thousand less that they are asking in the same neighborhood you've wasted paper.
Another alternative to foreclosures would be homes that are being offered as a short sale. These usually require less repair because they are still occupied or recently vacated and the owner has not taken out their frustrations by trashing the home or letting the pipes all freeze.
The Michigan Group has agents and a third party company specializing in negotiating with lenders over short sales.
Example: I had a house listed with no carpet. They wouldn't replace the carpet even though it made it much less salable. Not just from the buyer's viewpoint but also the lender's; an appraiser would call such a home (at least in my market) "uninhabitable". This means the types of loans available that the home qualifies for have been hacked down to a small handful if any (keep in mind, the buyer too has to qualify for the same type of loan).
I'm sure they lost money over this decision to not put in new carpet. I also had asked to have the house cleaned (it needed it), they wouldn't pay for it.
A bank in my experience will not negotiate at all or very, very little. They WILL drop the price as the subject sits on the market. But the second a buyer says "we want you to repair this" or "pay for that" the bank laughs and laughs and quietly says "no". My advice is, don't expect to negotiate on ANYTHING other than price. You cannot get most banks to do things, things lead to liens and liabilities and/or paperwork. Just figure out how to pay for x yourself and then hack x off the price and offer price-x or whatever price makes you feel satisfied. Hope that helps!
Broker, CRS, GRI, ePro
Raving Real Estate
In addition to the previously stated great advice, I would just like to add that it depends on what you are asking for.
There are certain things that may be wrong with a home that make it unsaleable to anyone. A good example of this would be a fuse box versus circuit breakers. The only exception would be a 100% cash buyer and even then, the buyer would not likely be able to get home owners insurance and that would be quite a risk.
There are other such negotiable items that the mortgage holders will address if presented in the correct manner.
Linda S. Cefalu
1. Definitely have a home inspection, as this may reveal items that warrant a reduction in price and/or major issues that you wouldn't otherwise be aware of.
2. In my experience, it seems like banks are more willing to negotiate on properties that have been on the market for a while, much more so than a newly listed bank-owned home.
Coldwell Banker ALM