I 'm looking to buy a home and get a deal. I saw a foreclosed home for 159,000 and asked my realter to place a bid for 120,000 he refused.

Asked by Firsttimehomebuyer27, Tucson, AZ Mon Mar 7, 2011

He stated that it was a waste of time to put in such a low offer. He said that the banks get the homes appraised and that I should offer around the asking price if not higher because the bank won't accept my bid. How I look at it, what is the worst the bank could say? No, so why is my realter being lazy and refusing to help me? .....Commision? I need someone to help me get a good deal. Am I asking too much because I've never bought a home before and I don't know what is costomary to ask for?

Help the community by answering this question:

+ web reference
Web reference:

Answers

62
Lindsay Daley, Agent, Tucson, AZ
Tue Apr 12, 2011
The simple truth is that, though it is always a gamble offering much less than listed, your agent ultimately answers to you. If you want to offer 39,000 less, your agent should do it. He or she should also council you on the dangers and potential short falls of writing what some could consider an "insulting" offer.

Your agent should be able to pull comps on that property and ACCURATELY price it, letting you make the most informed and financially intelligent decision you can make.

If I can help you further, please don't hesitate to click the profile and shoot me a message. : )

Best of Luck in Your Search!
2 votes
Stephanie We…, Agent, Gilbert, AZ
Mon Mar 7, 2011
Your agent is right. More than likely, that offer will not be accepted. That's a $40K difference or a 25% reduction from the asking price. Keep in mind, most properties on the market today are 30-50% below what they were at the peak so YOU'RE GETTING A GOOD DEAL :>) While I would offer a lower amount to start, I think it is a waste of the agents time to have them write an offer they know won't get accepted. Ask them to forward you the comps so you can see what pricing similar properties are closing at and then have a realistic conversation with your agent. Do you want the property or don't you? Therein lies the question. Good luck!!
2 votes
William DeCo…, Agent, Geneva, NY
Thu Apr 21, 2011
If anyone makes an offer on a property, all offers must be presented to the seller : no matter the conditions of the sale or ownership - seller of the property has the right to see all and decide on which one to accept. The agent cannot assume or refuse to present an offer. Your agent should be as clear as possible and detail all conditions of the listing so you as a buyer can make a fair and educated offer.
1 vote
Frederick Sh…, Agent, Garland, TX
Thu Apr 21, 2011
A Realtor is not a filter for the seller. The law in TX is clear ( and for many states) that all offers will be submitted to the seller. If you want you can file a complant with AZ Real Estate commission.
1 vote
Teri McGinn, Agent, Attleboro, MA
Thu Apr 21, 2011
There is no reason your realtor should have refused to submit yrru offer. You are correct, the worst the bank could say is "no", better yet, they could have counter-offered and you could have possibly come to an acceptable agreement. Keep looking, I'm sure you will find an agent that will represent your best interests. Just because a bank does an appraisal, otherwise known as a BPO, it doesn't mean they priced the property based on that appraisal and it does not mean that the agent completing the appraisal was accurate in their pricing strategy.
1 vote
Shane Willis, Agent, Pensacola, FL
Sat Apr 16, 2011
Well a couple of things happen here. You are getting a little low (at least for my area) so it would be my job to educate you on what prices are realistic. This would need to be done based off of pure facts (show me comparables of listing prices and sold prices in the last 3 months).

I can say that if a realtor goes around putting in multiple offers that are really low they get that reputation and some banks will not even look at their offer because of that reputation.Seems like you were close on the percentages but still a little low. Ask him to give you the comps that show banks getting asking price or above. He refuses to do that.....get a new realtor....Just my 2 cents.
Good Luck
1 vote
Lee Goldman, Agent, Plantation, FL
Thu Apr 14, 2011
I would find a new Realtor. If you want to put in an offer, the agent is just being lazy. They don't want to work. When buying a foreclosed home, they usually sell within 5% of the asking price. Just make sure that you have an inspection done. When a house is sitting empty, thing always start going wrong.
1 vote
Carolyn Reyn…, , Tampa, FL
Wed Apr 13, 2011
Many buyers believe that they can purchase a short sale or foreclosure for mere pennies on the dollar. The bottom line is that the banks are going to seek market value for the property. Your agent should provide you with a Buyer's Comparative Market Analysis (CMA) to demonstrate what homes in your area are selling for (or not selling for). Once armed with that information, you should make your highest and best offer. To low ball could be a mistake if you really love the home. Often, in an REO situation, the bank won't even counter a low ball; they'll wait for a serious offer from an educated Buyer.
1 vote
Marilyn Stark, Agent, Tucson, AZ
Fri Mar 25, 2011
Hi Firsttimehomebuyer

The duties of an agent include:

* Working for you at your direction.
* Following your instruction to place a bid at the price you select.
* Putting your interests above his own.
* Being careful, obedient, loyal
* Maintaining confidential information, advising, etc.

I encourage you to discuss the agent's reluctance to perform your request. If he/she is unwilling to follow your instructions, it may be time to find someone who will.

Banks are not in the business of owning homes and want to sell at the current market price. Only the Bank can determine the price it will accept. In the current market, the Bank may consider an offer below the asking price if no one else is interested in the property.

Good luck at finding a great deal on a home,
Marilyn
1 vote
The Oliver T…, Agent, Ovilla, TX
Tue Mar 8, 2011
I would advise your realtor that you appreciate their opinion but would like to submit the offer. If they refuse again, then I would talk to the broker of the agent and inform them of the unwillingness of your realtor to properly represent you. It may very well be a low offer and not accepted, but you who's to say that it will not be accepted or even countered? Just as some other agents have said below, the few times I have thought offers were to low, but submitted the offer anyway, we have either come to terms or they have countered and my client decided the seller just wasnt willing to come down low enough for them. Theres a good saying that is relevant to this situation, " If you never ask, the answer is always no!"
Hope you are able to input your offer and get a great deal!
Have a Blessed Day!
1 vote
Jeffrey Masi…, Agent, Scottsdale, AZ
Tue Mar 8, 2011
Dear First:

Good point.

Yes, I agree. The worst that can happen is that the seller can say no. Or, the seller may say no but counter.

It is true that banks get appraisals. However, sometimes they get appraisals are wrong based on locatioin, quality of property, upgrades of the comparables, different builders etc. The bank will attempt to get something close to fair market value. However, there are many things to consider when determining fair market value.

There are Realtors out there that do not mind submitting multiple offers and see if one "sticks" agains the wall.

May I wish you the best in your search for the "deal". It is the American way.

Jeff Masich
Arizona Homes and Land
HomeSmart
Web Reference:  http://ArizonaHomesLand.com
1 vote
Spirit Messi…, Agent, Tucson, AZ
Mon Mar 7, 2011
Did your agent review the comps with you? Typically the banks have figured it out & are pricing the REO (Real Estate Owned) to sell. Sometimes the buyer needs to recognize a good deal when it is priced "right". At the same time, it is a process. I have worked with several first time home buyers & sometimes they need to lose a few before they find the right one at the right price. I understand if you listen to the media a buyer could think "they" are giving houses away (they are not). Your agent should have explained this & had a conversation with you. Refusing to put in the offer you want to make, even if it is a "waste of time" is not the answer either. Best of luck. Spirit
1 vote
Nicholas Sfo…, Agent, Great Neck, NY
Thu Apr 21, 2011
The realtor is correct that banks get the house appraised and are very stern with their price, however if the home has been on the market at that price for a while, the bank would obviously be willing to negotiate. The Realtor has to present your offer and if he refuses, then find another realtor. I have personally been in the market for foreclosures and found it to be frustrating myself. Instead of looking to low ball their asking price, have your realtor show you comps in the area. If the homes in the area are selling more then the foreclosed home, then you shouldn't be too upset to pay close to asking for it. Good luck!!
0 votes
Robert Adams, Agent, Henderson, NV
Thu Apr 21, 2011
Depending on the market what your Realtor is saying may very well be true. I can not speak for the Tucson market but in Las Vegas that type of offer would be laughable. Most sellers would not even counter but rather straight reject the offer. You should also know going in if there are multiple offers or not. If there are multiple offers it is not uncommon to offer list or slightly above. These rules of thumb change as the market changes. From what you have posted above it sounds like your agent is trying to educate you as to the demands in the market and trying to avoid wasting "anyone's" time, not only his own.
0 votes
Stephanie Te…, Agent, Upper Marlboro, MD
Thu Apr 21, 2011
Maybe your realtor has some inside information; maybe they have pulled the comparables and found that nothing has sold for much less than the asking. Maybe the house does not need much work; there are so many thing to consider. If none of these are the answer, ask another local Broker for their opinion. There are so many factors to think about when you place an offer; some of them may not be obvious to you, so ask questions.
0 votes
Colvina, , 06119
Thu Apr 21, 2011
A realtor should never outright refuse to present your offer. It is the job of your realtor to educate you on market trends in your area and show you comps for the property being bid on.
Taking into consideration the location and condition of the property...with the advice of your agent you should be able to make a solid offer.
One that is too low may invite a bidding war which is something most buyers want to avoid.
Find a REALTOR you trust and and have confidence that they will act in your best interest.
0 votes
Rob & Cather…, Agent, Tucson, AZ
Thu Apr 21, 2011
Although a Realtor should not refuse to make an offer on your behalf, I would counsel you to look closely at the comps of the neighborhood before placing an offer on a foreclosure which is significantly lower than asking price. Many that we are encountering have purposely been underpriced to create a multiple bidding situation. It's not uncommon to have 4 or more bids on the same property. Find a Realtor who has experience in selling foreclosures, look at the numbers and make your bid based on the numbers and his knowledge. That way you won't risk being outbid.
0 votes
zoe Herringt…, Home Buyer, Saint Simons Island, GA
Thu Apr 21, 2011
My answer is thus: The answer is "no" unless you ask. The realtor CANOT and SHOULD NOT represent what the bank will or will not accept. Find a new realtor. Report this realtor to your state board.
0 votes
Jacqueline R…, Home Buyer, College Area, San Diego, CA
Wed Apr 20, 2011
Keep looking and don't give up. There are several foreclosures especially in the Tucson area and many of them sooner or later will reduce their price. Unfortunately, there are many bad brokers too out there and they just take care about their commission instead of their clients’ needs, or wishes. Discard those immediately.
0 votes
..., , Lexington, MA
Tue Apr 19, 2011
As some said, the Realtor should have submitted your offer. That doesn't mean it would have been accepted, of course.

You should really ask yourself upon what information did you base your bid? A price you would simply LIKE to see or was it based on fair market value? Don't forget that the bank is already out of a lot of cash - the very definition of a "short sale" - so they would want to sell as high as possible.

Find another agent with whom you're more comfortable asking these questions. If you have finance questions,feel free to ask me!

Tom
Thomas.Stevens@flagstar.com
0 votes
Mary Schweich, Agent, Prior Lake, MN
Tue Apr 19, 2011
A Buyers Agent responsibility is to represent the buyer. In my opinion, time should be spent doing a market analysis on the forclosed home and condition and educating you the first time home buyer on the offer process. My advice is to use an agent that works in the area that you want to purchase a home. Also, I believe that your agent needs to be experienced in real estate and writing offers to be helpful in this situation.

Good Luck!! Mary Schweich, Realtor~~Edina Realty
0 votes
Lou Barbee /…, Agent, Rocky River, OH
Mon Apr 18, 2011
The difference in commission is minimal.

If it is a bank owned property the bank almost always counters at full price but they will move on it eventually. (The caveat is that if it is very well priced, there may be multiple offers on it.)

Did you ask the Realtor why he thought you must offer asking price? Does he know of other offers? Maybe it's not a case of laziness. Maybe he has information he isn't (or can't) share. (Is the Realtor also the listing agent?)

Still, with bank owned properties you never know. Even if there is an accepted offer, the Buyer may back out or not get financing. The Buyer could also get tired of waiting for a response from the bank.

There is always the possibility that even if there is a contract, it could fall through. You could submit a "back up" offer. It's worth a try.

If your Realtor doesn't give you satisfactory answers, try speaking with the Broker. There should be someone who will write the offer for you.
0 votes
Phi Jacobs -…, Agent, Raleigh, NC
Mon Apr 18, 2011
No you are not, asking for too much, unfortunately because I saw first hand a condo that
sold for 195K, 4 years ago, and it's a luxury condo be purchased for $105K, yes that is
correct. Unfortunately, for the sellers the banks are just giving them away. This condo was
gorgeous, great location, hardwoods, grantite, stainless, 2 bedrooms, 2 baths covered porch
as well. Private location.. Your realtor should have placed an offer for you.
Web Reference:  http://www.pamkarch.com
0 votes
Wanda Couch, Agent, Buford, GA
Mon Apr 18, 2011
The news and advertisements sometimes, leads consumers to believe that foreclosure means free. Why not? During foreclosure process, bank's money is tied up. It's getting no return on loan investment. Price drops in area, bringing furthur loss. Bank pays for cleaning, securing home, changing locks, lawn maintenance, Realtor commissions, utilities so property can be shown, attorney fees and usually closing costs. Part of the sales price might have to be paid to the 2nd mortgage holder. It all adds up. The tyed up money means less liquid money to lend on other loans. They try and price it right to get a quicker sale to avoid more loss. Agents in business have made enough offers to realize about how much lowballing is acceptable. BUT! I always write up all offers and advise that if you really want the home, don't take chances. I always do a new CMA on the neighborhood, showing number of homes on market , selling price verses listing prices and average days on market to help determine if the offer is really a good one or not.

Sometimes a foreclosure isn't a real deal. The owners usually can't even pay the mortgage much less do maintenance. You might be able to find a well maintained, move in ready home that will actually be cheaper in the long run. Bottom line is, I always look out for my Buyer!! I advise them, show them data to back it up and let them decide the offer price. Wanda 678-614-5883
Web Reference:  http://negahomes.com/
0 votes
Whitney Long, Agent, Conway, AR
Mon Apr 18, 2011
Honestly, I would always make an offer that my client asked me to make but I would advise you that that offer is way to low. If you are looking to get a good deal find a house that is about 20k over your max amount to spend and that has been on the market for over a year then make an offer of about 25k less and see what they reply with. A bank isn't that negotiable so they usually want what they have it listed for. Good Luck
0 votes
203k Guy, , Maryland
Sun Apr 17, 2011
You should find another Realtor. i would suggest asking if they have experience selling foreclosures.

There is a "203k Ready" program I would suggest could help you find the right people to help you. Most foreclosures do need at least some repairs. You will need: a Realtor, a 203k Lender, a Contractor and a HUD Consultant. Usually the HUD Consultant can put you n touch with experienced people.

It works like this:
You hire the HUD Consultant to look at the property and tell you what repairs are needed and how much they will cost. They prepare what is called a "Feasibility Report" that can accompany your offer. You then get a 203k Lender to provide what is called " automated underwriting approval" instead of the standar pre-qual letter that is required.

Your Realtor can then use that information to help "justify" your lower offer. The rogram works very well and I canrefer you to someone in your area if you like. More FHA 203k info can be found at http://www.203kServices.com
Web Reference:  http://www.203kServices.com
0 votes
Spirit Messi…, Agent, Tucson, AZ
Sun Apr 17, 2011
Thanks & you are right George as I considered letting someone else write up the offer I know will not be accepted plus they have removed all incentive or motivation by telling me they will not be using me moving forward.

Even with all that happened and transpired, I simply thought taking the high road & doing what I felt was the most professional option was the best thing to do. I do understand why some agents insist on buyer agreement before they show even 1 house. I still believe it to be unfair to new clients to sign something like that until I have demonstrated what type of agent I am & who they will be working with.

Once again you are right as we chose this profession. I don't think may outside of it understand for most of us no benefits, no salary of any kind, or Heath care &etc. As a third generation Realtor I understand this & knew what I was in for, and it can still be an eye opening & humbling experience.

Good luck out there.
Spirit
0 votes
George Szkup, , Tucson, AZ
Sun Apr 17, 2011
Spirit - excellent write-up/answer.
I am certain that this happens to many agents working with buyers. The best way would be to "drop" the jerk "right there and than" - but we usually do not. Why? Buyers are 'hard to come by “these days" so you always hope for the best - may be “they will "see the light". In the mean time, of course, we loose time = money.
George in Tucson
But we elected to do this work.
0 votes
PVBrokers, Agent, Palos Verdes Estates, CA
Sun Apr 17, 2011
It is not in your best interest to have an agent that is truly not a fiduciary to you. If you ask an agent to submit an offer, he should simply do it. There is nothing wrong with the agent giving you advice. After all, that is why you hire one. In terms of the foreclosure market, he is partially correct. You are competing with other bids in a pretty blind process. If your bid is very low, it will decrease the possibility of the bank dealing with you. If you come in low, come in all cash. Hope this helps
Web Reference:  http://www.pvbrokers.net
0 votes
Spirit Messi…, Agent, Tucson, AZ
Sun Apr 17, 2011
On a side note since I originally answered this question. I recently had out of town clients, showing them 30 homes in 24 hours, along the way I worked very hard to set proper expectations & etc. In the end, they wanted to make an offer on an REO for much less than asking price (it had been on the market just 7 days) & asked for a large $ in concessions as well. I explained that if they really want the house, they would need to make a "better" offer & they were upset by this asking me if I "work for the banks". They kept referring to the city they are from, and I have to explain each market is different which some people truly do not understand.

I do know the Tucson market & if a REO is listed properly it will sell. Many times I have seen REO's sell for > list price & under 30 days. I also understand that for some buyers they will need to lose a few before they realize this. Because of my honest nature these clients have already informed me if they do not get this property they will not be using me going forward. After i put everything on hold to show them 30 houses on their tight and short schedule.

I still believe it is better to be honest than say nothing, which is the easy thing to do. Don't get me wrong, still wrote up the offer & followed up with listing agents, doing all i can for them. I didn't even ask for a Buyers Agreement before showing all the homes, but had to when I wrote up the offer as per my brokerages policy.

Your agent should have wrote up your offer, but i understand & have empathy for both sides of the transaction. Some people have different expectations & don't fully understand the process. As an agent & Realtor I sincerely try & educate but there is only so much we can or should do.

Best of luck.
Spirit
0 votes
., , Reston, VA
Sun Apr 17, 2011
Many thoughts pass through my mind ... If you never have had a home I am betting that you are not familiar with problems associated with a foreclosed home and that is a red flag to me as your realtor. There are numbers of things that could have gone wrong with the home while it was in possession of the prior owner and the bank that are not disclosed. Neither the bank nor the former owners are required to provide a Seller Disclosure so what you see is what you get. And, there may be many issues you cannot see that you will also get... this could be time consuming and very expensive. What appears to be a sweet deal can turn sour quickly.

Don’t waste your realtor’s time by lowballing the bid as he knows the bank may look at a bid that is close to their price but not a low balled one. Follow his/her advice and you may win the bid. Also, get an inspection and an option period avenue to bail out if the inspection comes back negative.

Better yet, if this in your first home and you are not in the construction business, I recommend you buy either a new home that has a warranty or a pre-owned home that has a sellers disclosure document disclosing any problems and issues about the house and purchase a home warranty.
0 votes
Monroe Talley, , Austin, TX
Sun Apr 17, 2011
It depends...how long has your agent been working with foreclosures and how many things has he/she giving you incorrect advise? I don't necessarily think the reduction you are asking for in the above example is such a long shot but it also depends on the appraised value of the home. Your agent wants to put food on the table and have you satisfied so that you might pass on the 'good word' about him/her and their hard work.
0 votes
Phyllis Cros…, , Tampa, FL
Sun Apr 17, 2011
At this point, I would find another Realtor. You can interview Buyers' agents. Ask friends who was their Realtor and start there. Interview two or three. One will stand out. IF the home is still available you can make another offer. Make sure you review COMPS with your agent.

Good Luck! Feel free to call me if you need help..

Phyllis Crosby, Realtor/GRI
REMAX REALTEC GROUP
TAMPABAY,FL

813-886-2356
phylliscrosby@tampabay.rr.com
0 votes
John Myers, Agent, Albuquerque, NM
Sat Apr 16, 2011
Find a new Realtor. Ask your new realtor for comparable sales in the area. Most recent comps are better in this market. My exprerience is that banks will counter your offer if your offer is greater than 80% of list price. This is just an estimate and there are no hard and fast rules. It is not impossible to buy bank owned homes at 90% of list price. Banks want to sell their foreclosures and will drop the price periodically if the house languishes on the market. Remeber not all foreclosures are good deals.
0 votes
Terri Vellios, Agent, Campbell, CA
Sat Apr 16, 2011
You agent has a set of standards he choose to work with and by. When he knows a property is under priced and someone wants to submit an offer that is not realistic for the market he is telling you one of two things, (1) Why waste your time, the listing agents time, the banks time and his time when he knows that the offer will not be considered. It may not only not be considered, but you may black-ball yourself with that lender and they may not want to look at ANY other offer you submit. (2) He doesn't want to work with you.

Your agent sounds efficient to me. He knows how to manager your time and his time. If this is not the agent for you discuss with him if something can change. Then the two of you decide how to proceed.


Good luck.
Web Reference:  http://www.terrivellios.com
0 votes
Torquil Cree…, Agent, Austin, TX
Sat Apr 16, 2011
Hi there--
A Good Real Estate Agent will educate you, inform you, advise you, make suggestions based on experience & knowledge of the neighborhood, etc...However, the Realtor works for YOU & should submit your offer.

At some point, if you keep making offers that are unrealistically low, you may find that your Realtor's advice is based on experience & if you truly want to buy a home you may need to adjust your expectation of what a "Good Deal" is. Find a Realtor that will work WITH you to find you the BEST possible DEAL based on your needs & is known for negotiation skills.

Sometimes you will find better deals on New Homes that are offering various incentives. (and no headaches or costs of remodel, etc...) They sometimes offer ALL appliances, washer & dryer, blinds...As a First time buyer you may qualify for o down/o closing/o move in. A Realtor that is familiar with incentives & various Loan assistance programs is a great resource for getting a GREAT DEAL on a Home. Foreclosures are not always the best deals anymore.

You will find the right Realtor & the Right home!! Best of Luck to you in your search for both!!
0 votes
Judi Monday,…, Agent, Green Valley, AZ
Sat Apr 16, 2011
Hi First Time Home Buyer,

You are entitled to have an agent submit an offer that YOU want to submit. Our job is to "guide" you in the process but bottom line is that YOU decide the price you want to pay. Just so you know in many cases a lender will not even give you a counter offer that falls outside of their "pricing guidelines" for a particular home but I have seen exceptions made especially if they have been no offers and the property has been languishing on the market for a period of time. Remember the answer is ALWAYS no unless you ask. So if the agent you are working with won't write the offer, give me a call at 520-241-7780 and I'll find you an agent who will.
0 votes
Jeffery Pra…, , Onalaska, WI
Sat Apr 16, 2011
I would get a different Realtor as well. It is true that a bank may not respond to a low ball offer but if that home has been in foreclosure for a long period of time they will probably be more receptive and then will counter back. I have sold two foreclosures of late both with very low initial offers. One was sold for 20k under asking and the other 33K under asking. Banks do not want to keep the inventory they want them off the books. Any Realtor should work with you and submit the offer you want to make but along with that giving you their advice about the offer. If they are keeping track of market conditions and what is on sale in that area you can get a lot of things accomplished.
0 votes
Michele Vesel, Agent, Superior, WI
Sat Apr 16, 2011
You have the right to have your offer submitted with the terms you choose. You need to keep in mind you may be in competition, so that may have a bearing on what you would like to offer. Your realtor can pull similar sold properties so you can make an educated decision. The REO company will reject your offer if it is too low, and they will counter your offer if you are in the ball park.
0 votes
Kimberly You…, Agent, Bean STA, TN
Sat Apr 16, 2011
Short Sales are very time consuming and the compensation for the time involved is very low. If your Realtor has explained the process to you and has experience completing short sales then its in your best interest to listen. Yes the bank does get an appraisal before they make a decision on price.
If your offer is very low compared to the market the bank may not even respond to your offer. If you put in something within reason you need to know that if the bank comes back with a counter offer, that you can financially come up to their counter.
Keep in mind that they are not in the business to give property away, they know the market conditions. If you have a reasonable offer, you won't be disappointed. Just be prepared to get a counter.
There is nothing worse for the Realtor then putting together all the paperwork, submitting the offer, then waiting for an answer for months only to find that you either couldn't afford a counter offer or that you weren't serious enough to want that house. All that time and energy for the deal to go south.
On the selling agent side, he has worked many, many hours diligently to get the approval. If you don't follow through on the purchase, the deal is dead and has to be re worked from the beginning. Months!!
A Realtor that is experienced will steer you the right way!.
0 votes
Henri Vasquez, Agent, Wheaton, IL
Thu Apr 14, 2011
I would ask to see all the comparable sales (within 6 months) and active listings. From that information you should be able to see whether your offer is comparable. That should give you an idea whether the property is priced well or not. Appraisal by bank really doesn't have anything to do with it. Also, have your agent call ahead and ask how many offers have been placed. This will give you an idea of what you are competing with.
0 votes
Dawn Garzone, , Avon, CT
Wed Apr 13, 2011
Short sales and foreclosures can be very complicated to navigate. You should be made aware as a buyer that the bank's typical goal when pricing these homes is to get some attention, hence the low prices. Once they get that attention, they ideally hope for multiple offers which pushes the price up. Coming in low can work to your disadvantage if you are really serious about purchasing the home because you will loose it to a higher bidder. On the other hand, if that is all you have to spend, why not try? We have all seen great foreclosures deals in this market. The key is knowing what you are getting into in terms of the condition of the home and status of the property, because these are sold "as is", so have solid representation on your end for your own protection. Engage a Realtor who understands exactly where you stand and who will be your advocate, but you must remain realistic when making an offer based on comps your agent has provided you. Good luck!
0 votes
Justin Ruzic…, Agent, Greenville, SC
Wed Mar 30, 2011
first time home buyer, this is a question asked to me a dozen times a week. Here is a blog i wrote to answer.
http://2000shortsales.blogspot.com/2011/03/buyers-must-readj…

ps. Here is another blog about "buying the home of your dreams"
http://2000shortsales.blogspot.com/2011/02/buying-home-of-yo…

best of luck in your pursuit. Enjoy it is a fun adventure.

Oh by the way, if you find my blogs helpful to your question please mark it as best answer.
0 votes
Jen Butel, Agent, Austin, TX
Mon Mar 28, 2011
I am always willing to submit an offer, but I have advised clients against going in too low on foreclosed properties that are recently listed at an obviously great price. Many of the foreclosures in my area are held by a few brokers. You can lose credibility if your offers aren't within a certain range. For properties that have been on the market awhile, I've been successful at negotiating some great deals.

Best Wishes,
Jen
0 votes
Jan Bowman, Agent, Georgetown, TX
Mon Mar 28, 2011
Several years ago I had the same situation with an agent. She did not want to make the offer as she thought it was too low. I let her talk me out of it. With in 24 hours the home sold for the price I asked her to offer. She did call and apologize. Your agent probably feels they are advising you well, and as I have recently experienced banks are holding closer to their asking price than a year ago. There are no rules here, if you happen to hit a bank who really wants to let this property go, they might take it. You will never know unless you offer. You can always offer more. I would insist on making the offer. Remind your agent he/she is required to write any offer you request as long as the terms are legal.

Jack
0 votes
Kathy Bryan, Agent, Heber Springs, AR
Fri Mar 25, 2011
As a Realtor in Arkansas, I am obligated to present ALL offers made to the Seller, regardless of who the Seller is, or what the offer is. The agent doesn't get to decide what a Seller will or will not take for a property. My suggestion to you is to find another agent, preferably a Realtor to make your offer through. Also, if you signed an exclusive buyer agency agreement with that first agent, you need to cancel that agreement first.
0 votes
Connie De Gr…, Agent, Los Angeles, CA
Fri Mar 25, 2011
I understand how you feelr but your Realtor is probably right. The problem is that you are new to buying and it would have been helpful if your Realtor would have taken more time to explain things and furthermore, show you examples of other bank ownd homes that have sold in this manner (the list price and recorded sales price) as well as recent sales in the area. Unless you know market values in your area of interest, you won't really know a "good deal" when you see it. Information is key so go out there and keep your expectations high for whomever you have assisting you. Good luck.
0 votes
Accurate Ins…, Other Pro, Chicago, IL
Mon Mar 14, 2011
I'm not a realtor so I can't address the specifics of what your realtor should be doing. It is my understanding that a realtor is supposed to present all offers on behalf of their client.
I don't know what the AZ market is like but I am a bit surprised your agent didn't want to present the offer even if it is ridiculous. A shot at a commission check is better than nothing. Maybe your agent has been around the block a few times and is being realistic.
This brings us to one of the under-discussed problems in todays market, unrealistic expectations of buyers. You've stated you are a 1st time buyer, so I am not accusing you of anything, frankly you just don't know, and that's Ok.
One of the problems with all the hype and advertising about it being a 'buyers market', is that it has made some buyers nuts. I run into buyers consistently who think they can steal houses or get the deal of the century. Current prices are pretty good deals already generally speaking. This nonsense of offering 20,30,40 % less than asking is out of control with some people. The current owner probably has a mortgage of some type and it probably isn't 40% less than asking. Anyone who actually wants to sell their house isn't jacking the sales price up 30%.
I realize agents are in a difficult spot with this. I've talked with agents who have said they'd love to tell their buyers to go take a flying leap. Agents have told me that some of the offers they've presented have been embarrassing and a complete waste of time. Buyers however demand the offers be presented. Some agents might want to consider growing a pair but that of course is risky because they could lose that business by upsetting the client.
In your situation, the 120 seems a bit low. I don't know that I would offer asking either though. You may want to consider doing more REO research in your area to see how weak or strong the market actually is. Does your agent have experience in REO deals? It's a little bit different of a ball game.
Good luck
Web Reference:  http://www.aic-chicago.com
0 votes
Jonathan Dal…, Agent, Glendale, AZ
Tue Mar 8, 2011
> We are only hear your side of the story, but the agent should present all offers.

Christine, from what I'm reading this is a question of writing the offer and not presenting the offer, as a listing agent would present an offer to a seller.

Firsttime - the thing is, if there's virtually no chance of an offer getting accepted there's a decent chance that I won't write it. As an agent, I don't get paid per contract written and I don't need the practice either. My job isn't to blindly write whatever offer one of my clients want. If that's what you want, there are thousands of other agents in the Valley who will help you write offers that won't end up in you purchasing a home.

My job - any agent's job - is to help you purchase a home. If the home is priced at market value, offering more than 20% under that list price will get you nowhere. I've run the numbers here in the Valley and I doubt it's different in Tucson - only a couple of percent of homes sell for that large a discount below list price.

As I said, there always will be agents who are more than happy to write any offer you want with no real regard for whether it's going to get you into a home. If they're offering you no guidance on the market, though, you're better off finding an agent who will give you an honest assessment of the market and how best to purchase.
0 votes
Bill R. Jones, , Tucson, AZ
Tue Mar 8, 2011
Banks/lenders have appraisals ususally for the value of homes they have on the market. No lender is going to accept something that absurdly low. Your agent probably told you that this property sold for up to twice this amount within the last 5 years: hence, it is a DEAL at the price listed. It is likely you are not realistic in your offer and you have an experienced enough agent to not waste his/her time writing an offer that is going to not be accepted and being that low may not even be countered. Watch the sale on this and likely you will see that it sells for near list price; certainly above what you wanted to waste time writing. If this kind of offer is what actually sells the property, then it is likely the lender will have to have several priced reductions before this amount will be accepted. I am assuming that the agent showed you comparable sales for the area; did they justify your price or the lender's?

Bill
0 votes
1 2
Search Advice
Search
Ask our community a question

Email me when…

Learn more