Correction needed to a contract from possible overbid to a below market listing?

Asked by Jerry Zheng, Milpitas, CA Sun Jan 29, 2012

This seems to be a pretty good investment property listed @ 30 -35 % below market. I was told that the bank who foreclosed on this was owed only 95% of their asking price. To act fast, without looking the property, I made an offer and my cash offer (15% over asking) was accepted immediately. Here comes with my questions/suspicious about this whole thing:
1] Does this sounds right for the bank listed this so low while they can make more money?
2] How did this property even become foreclosure initially if the value of the house is much high than what the original owner's mortgage?
3] I was told there are multiple offer on this, this is why I act what I did, with the speed of getting accepting, I wonder if I overbid on this
4] What can I ask now to compensate if overbid was indeed the case, I can ask credit after inspection (paint, carpet replacement and etc), right? Any other idea?
Only 7/15 days for Inspection/closing, clock is kicking. Your prompt advice is appreciated.

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Hena Martin, Agent, Hot Springs, CA
Wed Feb 6, 2013
My opinion is contact the agent your working with and allow her to assist you ,she/he could direct you in the right direction ,thanks HENA MARTIN BROKER
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Sue Archer R…, Agent, Palm Harbor, FL
Mon Jan 30, 2012
Sounds like you 'put the cart before the horse' all around here. Start at the beginning. Go see the property, do the proper inspections and valuations of the property and then decide. All of that should be done quickly as you are already in contract.

Your buyer's remorse may or may not be well founded. You may have just gotten a real bargain! You won't know until you do your due diligence. Good luck!!
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Roland Vinya…, Agent, Sprakers, NY
Sun Jan 29, 2012
1) The bank can list it for whatever they want. If they make money, more power to them. If they lose nobody but the bank cares. It will bring what the market bears.
2) My guess is that the previous owner did not make payments.
3) You will only know this if you know what the other bids are. And that is not likely.
4) Let's see what the inspection reveals. What contingencies do you have?
5) It is NEVER a good idea to buy something sight unseen. Your inspection in this case is very important.
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Gary Meek, Agent, Antelope, CA
Sun Jan 29, 2012
Jerry, these are questions your agent should be answering for you. It is their fudiciary duty to protect you in every way he/she can. To answer your questions, the bank has the ability to foreclose on any property where the person is not making payments, even if there was equity in the property. Some people let their properties go nto realizing what the true value is. So, the bank now owns the property and can sell it for whatever they want. They usually get 2-3 evaluations of the property, BPO's or appraisals, to help them calculate the value of the property. Currently in the Sacramento market, the banks have been pricing the homes aggressively to liquidate the properties faster. There is also limited inventory for sale, so the properties are gettign multiple offers. I hope this helps you out. I see you are from Milpitas. I am originally from Fremont, and have been living and working in Sacramento for 9 years. Best wishes on your pruchase. Please feel free to contact me if you would like specific information on your purchase and to confirm if you did or did not get a good deal. 916-995-9385
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Mark Forster, Agent, Elk Grove, CA
Sun Jan 29, 2012
We need to look at your questions one at a time.
1) If you haven't seen the property how do you know it's low. Maybe there are issues with it that warrant the low price. You should always know what you are buying unless you are looking to do a total rehab and the cost isn't an issue.
2) Again, if you haven't seen the home how do you know the value is much higher and have you confirmed your value figure with a Realtor's assessment of value. Zillow's Zestimate is not accurate if that's where you are getting the information. Some homeowner's get so depressed with their lives these days that they aren't thinking logically and just walk. If they were behind on their payments the bank may have been bugging them so much they let it go. Possibly there was a death and fell into the cracks.
3) In regards to overbidding, Is the home a good purchase? Is it at a great price? Was it a great investment for now and the future? Who cares if you overbid?
4) Why do you need to compensate for the overbid if you did? If you can purchase in todays market you should be excited. We have only the future to look forward to. As you should.
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