Is it still possible to make a lower offer (5% lower) on a bank-owned property that's been on the market for 7 days, if I can pay all cash?

Asked by Linguist, Seattle, WA Fri Apr 8, 2011

In case this is relevant -- the estimated value of the house is higher than the asking price

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Stacey Lange, Agent, Kirkland, WA
Fri Apr 8, 2011
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Our team specializes with bank owned properties and I am a Certified Foreclosure Specialist. Bottom line it really is going to depend on where the property is priced to start with. Periodically, a home will be priced well under value and sometimes sell for more than list price if there is significant interest. A good gauge for you as a consumer is to work with an agent who is very competent in determining market value, has the home been show numerous times since going on the market (were there a pile of cards on the counter?) -- but when it comes to making offers if a property is not priced so ridiculously low that I suspect might spur a bidding war. I would recommend to my clients a offer price of 5-7% below list price and standing firm with you offer, although you might settle at 3-5%.

Best of luck to you and don't hesitate to call if you want more information!
Web Reference:  http://www.key2yourhome.net
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Adrian Chu, Agent, Seattle, WA
Wed Aug 10, 2011
Yes, that is possible. In most cases, 5% doesn't mean much to a bank, when they are suffering some losses where they only get back pennies on the dollar. However, if there is another buyer who is interested in the same property and willing to pay all cash, but at a higher price, the chance is slim.

I would suggest you writing up an offer ASAP so that the seller knows that you are interested before it is too late.
Web Reference:  http://www.AdrianChu.net
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Rick Moore, Agent, Kirkland, WA
Fri Apr 22, 2011
When it comes to making offers on bank owned property I always like to mention that since you are dealing with a bank, the transaction is not an emotional one. This is important to keep in mind because when you throw out low offers on someones personal property, as opposed to a banks or larger investment companies property, you can truly upset them. A home is someones haven, the biggest and often times most important purchase they probably have ever made, and where they dwell with their most prized possessions; family.
When dealing with a bank however there is no emotion tied to the property, its a number-so making a low offer wont likely truly hurt anyone in the process. I am always more willing to make low ball offers on bank owned properties for my buyers because of this. The worst thatusually happens is they ignor the offer and you have to come up until you get a response.
However when dealing with personal property it becomes more important to treat the home you are making an offer on with a more gentle and thoughtful approach. Doing your research and making sure that you have legitimate case for presenting a certain price is more important because if you present a low offer, without solid grounds, you could offend the seller and they may not be willing to counter or sell to you period.
Banks are more logical- the longer the property has been sitting the more its costing them and the more likely you are to get a counter or acceptance to a low offer.
Given you have all cash to close, I suggest making a solid offer at a price you feel comfortable with, and a fast closing (7 days as an example) Keep in mind banks are already, as a rule, pricing their homes at a good price to elicit offers. If your agent can submit a CMA with a good case on the price you are offering you have a better shot as well.
I hope this helps. Let me know if I can be of any future assistance to you - Cheers!
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Rob Merhaut, Agent, Bellingham, WA
Fri Apr 8, 2011
Yes. Not only is price important...terms are very important as well. Every real estate deal is to be handled on a case by case basis.
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Dan Tabit, Agent, Issaquah, WA
Fri Apr 8, 2011
Linguist,
Cash helps when similar priced offers to yours are financed, but a financed full price offer with a solid down payment will beat a much lower cash offer.
You write that the estimated value is higher than the asking price, whose estimate? Zillow, Eppraisal and other automated valuation sites are easily 10% off more often than not, so don't rely on that data. Tax assessments can be all over the map too.
To make a decision on how much to offer have an experienced agent run a full Comparative Market Analysis of similar sales in the area. This will give you the best basis to decide how much a home is worth. Than make an offer based on how much you want the house. Well priced homes are selling quickly in a competitive market. We see buyers miss out on 2 to 3 homes they wanted because someone told them to write very low offers while another buyer paid what a home is worth. Best of luck.
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Bill Eckler, Agent, Venice, FL
Fri Apr 8, 2011
Linguist,

Any thing is possible but for a recently listed foreclosure, the bank is likely going to hold out at least a month for a minimum "full price" offer.

If the home is desirable and priced well below its current market value, waiting may create distance between you and this opportunity.

Good luck,

Bill
0 votes
Scott Godzyk, Agent, Manchester, NH
Fri Apr 8, 2011
NEVER base your offer on a percentage off a listing price, you need to assess what the property is worth in todays market and base your offer on that, you dont know if that asking price is at market value, lower than market value or way higher than market value. Cash is king but make sure you do not include any contingincies, that is just as important as paying cash to get the best price on a bank owne dhome

Please click the link to see my blog with a complete list of tips and advice on buying bank owned homes

http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_…

good luck with your offfer
Web Reference:  http://www.ScottSellsNH.com
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Pacita Dimac…, Agent, Oakland, CA
Fri Apr 8, 2011
Anything is possible. There's no real formula on how much less to offer on an REO.

By the way, most REOs are priced less than market value to attract the biggest possible target audience.

Have your realtor research how much the property foreclosed for, what the comps are, if there's competition. Cash talks (but make sure your terms and conditions are attractive, too --- for example, no request for repairs because REO banks will likely say no).

Then go for it!
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Mark Lindberg, , Seattle, WA
Fri Apr 8, 2011
You bet. The banks are wanting to reduce their inventory. They always have the option to say no or counter offer your offer. If you need help with this give me a call.
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