Home Buying in 91354>Question Details

Nicole, Home Buyer in Valencia, PA

Putting in a offer on a bank owned property.

Asked by Nicole, Valencia, PA Fri May 23, 2008

If I put a offer on a bank owned property, how long will it take to hear back. Say the home is 600k, the offer is fo 535k will the agent counter? What are the chances of them excepting an offer. I feel like dealing with a bank owned property will take longer. What is the process?

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Answers

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The answer is, it depends. I''ve sold a good amount of bank owned property this year in Santa Clarita, and I've had both very quick responses (24 hours), and as much as two weeks to hear back. It's not often that a bank "totally" over prices a home, especially in this market, where they tend to, on the average, have a large inventory of homes across different states that they want to dispose of as quick as possible. If the home you're making an offer on, has been on the market for more than 30 days, even better, more than 60 days, then you have a really good chance of knocking of $ off their asking price. But if they JUST did a price reduction down to $600k, and or, JUST listed the property - you don't have much of a chance (going with the odds)...of getting your price or anywhere close to it. I do real estate in Valencia/Santa Clarita...so I know this market extremely well.

Basically, you have everything at your disposal online, to figure out how much this home is really worth "today" ... and if its worth $535k or very close to it...then you're making a good offer. If you're just making the offer of $535k because thats what you feel it's future value will be, but it's really worth closer to $600k today, then you're either going to get really lucky, or you're going to end up getting a few rejections before you get the deal you're looking for. The Santa Clarita real estate market is really turning around, there is a lot of buyer competition out there, a strategy of offering about 10+% less than asking price just because, will rarely net you your first choice of home in Santa Clarita (unless you have the luck factor).

Whatever is the case with this property you're aiming for, and the reason you're offering what you are - best of luck!!
Web Reference: http://www.TheScvAgents.com
1 vote Thank Flag Link Fri May 23, 2008
Nicole,

The bank may take time to respond to an offer, if receives multiple offers. You must ask your agent if he/she can ask your question to the listing agent. Now, your offer may have a strong chance if no other offer was submitted. Sometimes, the property is not listed by the actual bank, but a service company and they have to go through the proper channels to obtain an answer from the actual property owner.

Don't get desperate! patient plays a big role in buying foreclosed properties, could take one day or can take a whole week. Remember, you offer must have included all the proper documentation in order for the listing agent to submit it. i.e. earnest deposit with at least 3% of the purchase price. If a cash offer, proof of funds. If financed thru a lender a pre-approved letter. If the property is a fixer upper how much money in closing cost are asking.

Many can be the variants in an offer that can determine its acceptance! If you working with a Realtor who's expertise is foreclosed properties you are in good hands, but if not then consult one who is.

Good Luck!
0 votes Thank Flag Link Sat May 24, 2008
Hi there Nicole. Hearing back from the bank depends on the bank and the home in question.What did the last home sell for in the area. How is the home priced? How many are like it in the area and how are they priced. The first thing you should do is work with an experienced agent who knows has experience with working with Bank Owned Properties. I do. I would be happy to sit downwith you and review the process involved. Fell free to drop me a line

Kind Regards
Michael Barron
First Team Real Estate (REO Dept)
0 votes Thank Flag Link Sat May 24, 2008
Hi Nicole,
The banks have the listing agents do what is called Broker Price Opinions before they even list the property. This is a type of market analysis that should be pretty current with what home prices should be selling for in the area minus the repairs that need to be done. Typically, on a bank owned property the people did not leave on good terms and sometimes they take things out of the house. If not, then you are lucky. They are angry and mad for losing their house. I have even seen electrical wires ripped out of the walls, toilets, faucets, ovens, dishwashers, cabinets, carpet etc.
I any event, I have dealt with bank owned properties and they do take longer. Many times, multiple offers will come in just because people think they are getting a good deal. You can get great deals, but typically, if the house is really nice, it could inflate the price with people trying to outbid each other.
Recently, we just closed one, and my buyers made a full priced offer and asked for 12,000 in closing costs to be paid by the seller. They did, however the whole transaction was horrible. It went over the closing date by 2 weeks because the bank did not have all the paper work to their escrow company. The grant deed was not there and nor was the power of attorney. My buyers were lucky and were able to stay in the place they were renting, but had they counted on that date to close, they would have had to rent a hotel and put their stuff in storage and then had to move it all again. The banks typically have their own escrow companies and they really are overwhelmed with work and you don't get the typical great service from a regular escrow due to the fact the bank's escrow gets handed all the deals and does not have to work for them. I cannot tell you how horrible this escrow was to deal with not returning calls etc. I am sure it all depends on the bank and the escrow, but going over 2 weeks after the close of escrow closing date sure was one of the hardest things for me to watch because I was helpless as the agent...waiting for the lender and escrow to coordinate funding, doc signing etc. Just know, it will take longer so if it does not you will not be disappointed.
Also, you do stand a chance in losing a house if you don't make a fair offer. If the house is 600K, and you offer 535, before you do, why don't you talk to you realtor to ask for comps of the area and compare what has sold to what you are looking to buy. If you really like the house and it is worth more, and the bank knows it because of the BPO that was done, then they may hold off. They are trying to get the highest dollar back on their investment as well.
Good luck!
Joan Patterson, B.A., G.R.I., A.S.P., Realtor
Keller Williams Realty
8250 White Oak Avenue, Ste 102
Rancho Cucamonga, CA 91730
951-204-1864
0 votes Thank Flag Link Sat May 24, 2008
The listing agent only forwards the paperwork to the mgmt company who is assigned handling the bank reo's. sometimes you may not hear anything back at all unless they accepted your offer, buyers agent listing agent have no say, FORECLOUSRES there are many tips and tricks on winning the bid on the property. GOOD LUCK
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Fri May 23, 2008
Nicole,

On average, buying a bank owned property can take longer, sometimes much longer. But it really depends on the bank, how long they've been holding the property, and how the market is doing in your area. The bank wants REO property (real estate owned) off their books as fast as possible. Sometimes you'll get a quick response, similar to a normal sale, sometimes you won't.

Regardless of the list price of the home, don't think that some discount off of that price makes sense. You need someone educated about the market who has access to the data to help you determine what it's worth. You don't want to pay $535K for a house listed at $600K, thinking you're getting a deal, only to find out it was really only worth $500K. Then you're going to be the one in foreclosure.

If you have an agent, they should have all of this information. And don't think that by doing it yourself that you're going to get a better deal by avoiding the buyer agent's commission. If the bank is listing the property with a listing agent, as most do, then the listing agent is just going to pocket the commission that could have been paid to your buyer agent.

Hope this helps,

Jeffrey
0 votes Thank Flag Link Fri May 23, 2008
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