We want to put a REALLY low offer on a home that has been in foreclosure for 2 years what is too low?

Asked by Jesica, 55422 Thu May 7, 2009

The home was built in 1910, nice shape with minor repairs as far as we can see. It has been in foreclosure for 2 years with no offers at this time. It started at $215,000 and now $99,900. We are willing to offer $71,000 because of unknown pluming status, surrounded by rental properties, and Shakes on the outside which has Asbestos. We had an inspector reassure us the Asbestos is only an issue if we were to nock down a wall or the house and we don't plan to do that. I were also hoping that because we have the full amount in our account from the loan they would be willing to accept. Is $71,000 a good offer? Should we go higher or lower. We really want this home.

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10
Debbie Irons, Agent, Orlando, FL
Thu May 7, 2009
Good Advice from Dixie..Look at your comps first and consider distress sale vs non-distress sale and overall condition.

I would add that you can also obtain public records information that displays what was owned on the property AKA through judgement papers on file. There have been many statistics run in the past couple of years to details what the banks are willing to accept as a loss on a percentage basis.
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2 votes
Dixie Brown, Agent, Beaumont, TX
Thu May 7, 2009
Jesica:
Congratulations on your decision to become a home buyer! It's a very rewarding yet emotional process. When submitting an offer on a property always keep in mind that your offer needs to be based upon comps for that property. I would strongly suggest that you align yourself with an agent that really knows the area and can give you all of the information you need to make a firm offer. Foreclosures can be tricky, so again I would encourage you to seek the assistance of a Realtor. They will be able to steer you away from any potential pitfalls and make your home buying experience a positive one. Good luck!
2 votes
Maryanna, , Pottsville, AR
Tue May 19, 2009
Offer what you are willing to pay. Period. It is a buyer's market right now. If this one doesn't work out check out http://www.foreclosuresUS.com and see other listings but also note the realtor's names and phone numbers. Many know of foreclosures 4-7 days before they go on the list.
1 vote
Romeo Danais, , Nottingham, NH
Sun May 10, 2009
If you do nothing else, read this and believe this as the ONLY way to buy a foreclosure.

Usually, when people lose their home to foreclosure they don't take the time to make sure its all cleaned and in good condition. And, they don't pay for a warranty for the new buyer. In other words, 'caveat emptor', let the buyer beware! If the bank is offering the property for sale through a broker, then tell the bank that you would like to do some inspecting before making an offer. Bring your home inspector and/or contractor through the house and get estimates on all of the repairs necessary to bring the house up to 'liveable status.' Wall should not have holes in them and be painted, all plumbing, electrical and mechanical should be operable, roof should be watertight and not in bad condition. In other words, 'fix up the house before you buy it and see how much it would cost to have various contractors fix up the house. Total these costs and subtract that amount from the market value. What's market value? Ask your Realtor to use comparable sales and determine market value (if you've got somebody that can't do that, get another Realtor).

Let's say the market value is $100,000. and it will take $25,000. to bring the house up to the condition that would make it a normal house for sale in a normal market. Since your going to be inconvenienced during the time the property is being renovated and you'll have to pay for the repair work out of you pocket as opposed to part of the financing of a new house, you will need to also subtract an amount from the market value for your time and trouble. Back to the calculation; Fair Market Value (FMV) minus fix up costs and a value for your troubles, say $10,000., or maybe $5,000. whatever you figure your time and trouble is worth, I'll use $10K. So, the most you should pay is $100K - $25K - $10K = $65K. Anything more than that is cutting into your profit for taking a troubled house off the market. Moral of the story, don't work for free!

Romeo Danais
A little history. I've bought and sold over 400 houses in the San Francisco Bay Area and most of them were foreclosures.
1 vote
Bizbuysell212, , New York
Tue May 19, 2009
I have direct relationships with the banks, call me at 631-316-7272. I will present my proof of funds all cash to get you the best deal, I will sell it to you for 10K more, I guarantee it will be cheaper then your 71K offer if interested.

Please let me know, thanks!

631-316-7272

bizbuysell212@yahoo.com
0 votes
a b, Agent, 1, IL
Tue May 19, 2009
You want to write an offer that they wont refuse. Will the 71k work? You wont know until you put it on paper. I tell people ALWAYS be prepare for a counter. If none is forthcoming then you know you wrote a good offer. Also remember sellers are motivated. They dont want/need all that inventory sitting around.
0 votes
Patti Ann Ka…, Agent, Coon Rapids, MN
Tue May 19, 2009
Even though lender owned properties are sold "As Is" that doesn't mean that you can't have it inspected and the plumbing checked. In fact, with an REO, you should insist on an inspection and make sure you make the sale contingent upon it passing an inspeciton. Your Realtor should be able to make arrangements with the Listing Agent to have the property de-winterized so that your inspector can evaluate the property, including the plumbing.

As far as asking well below the asking price, generally the lender will turn low-ball offers down. They have done their homework and have already figured the price of repairs into the sale price. By the time a REO reaches the market, it has generally had at least 2 Broker Price Opinions done and possibly even a full assessment.

Offer whatever you feel is best, but remember, if you REALLY want the home, you take a chance that someone else will submit a better offer.
0 votes
Aj Zaki, Agent, Boca Raton, FL
Sat May 9, 2009
Hi Jessica
If you (really want this home) ,contact an active reator in that area who does foreclosures and he or she will help you to come up with an acceptable number for your offer and will walk you through out the process ,.
Good Luck
A.J.Zaki
0 votes
Mark, Home Buyer, 20646
Sat May 9, 2009
I'm a home buyer/shopping and my strategy is..

In this market; if your not embarrassed by your offer it is not low enough. Obviously $215K was way out of line or it would have sold by now. It's not your fault they grossly over-priced it to start with!

Then again; that may be why I'm still shopping vs a home owner?
0 votes
John Tittle, , Minnesota
Fri May 8, 2009
I've seen offers like that work out, so it's not out of the question. "We really want this house". The real question is how much are you willing to pay?
If you don't make any offer you know what will happen. I see this all of the time. A good house sits on the market until someone finally steps up and makes an offer. Suddenly there are several others out there saying, " I would of done that". If you know what you want to do I wouldn't waste time.
0 votes
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