This means that you will want to offer the most that you can, not ask for pest control or repairs, not ask for closing costs and close as quickly as your lender can close, or bring in cash, This is the best advice for properties under $450,000. If you are an FHA buyer, you have an additional problem. While you may be willing to take the property "as is", the FHA appraiser may insist that certain repairs be completed prior to
close of escrow. Banks know this and often will take a conventional or cash offer at a slightly lower price if they know there are some repairs to be done. Also, on rehabbed properties, FHA requires 90 days from when the rehab people purchased before they will finance. This is known as the anti-flipping rule.
Best advice. Keep making offers. It may take many offers to purchase the property that you want. Maybe set your sights a bit lower. People do not usually get their dream house the first time out. Choose properties that are priced lower than your maximum by $20,000 to $50,000. This will give you negotiating room when the bank calls for highest and best offer.
Best of luck to you.
Basically the bank wants the most they can get, period.
That being said, most of the banks have had a reality check and some are actually hiring people to get the deals done. The general rule of thumb is they want to net out (after all costs, selling, escrow, taxes, HOA, back payments, etc) no less than 80% of FAIR MARKET VALUE, not original note (sorry Chris) You should figure selling and closing expenses between 6-8% or more of the purchase price, so in reality you should be able to get a deal approved around 10% below market price. The big question is what is fair market value?.
If you are working with a competent agent or broker, they should be able to do a market analysis and get a number close to reality.
As others have said, CASH is King, but the bottom line is the banks wants to lose as little as possible.
Bear in mind, banks DO NOT want to foreclose. It is really really bad for their bottom line and it has a negative impact on their cost and ability to borrow money to lend. At the end of the day, they will take a reasonable offer so they donâ€™t end up with a non-performing asset
I would be happy to sit down with you and go over what you are looking for and figure out the best way to help you make that happen.
Then you have to hope you have the better offer, not just the right price that counts but how much you have to put down and your credibility.
Lee Symboli Realty Owner/Broker
Diane Conaway, RE/MAX United, (760) 749-2888