can you negotiate a bank owned home?

Asked by Jen, Wyandotte, MI Mon Jan 21, 2008

Help the community by answering this question:

+ web reference
Web reference:


Maureen Fran…, Agent, Birmingham, MI
Mon Jan 21, 2008
You can certainly try. We represent a number of different banks, and I have to tell you it can really vary from lender to lender and from situation to situation. Some banks respond quickly and want to negotiate within reason. Others are fairly firm on their price and terms. In my personal opinion if you are looking for a bargain, the best one will not be a bank owned property. It is more likely to be a corporate transfer, estate or super motivated seller with equity. Personally, I would hope you have an agent assisting you, as there are many more pitfalls with a bank owned property and you don't pay the commission as the buyer.
Web Reference:
1 vote
smith3gary, Agent, White Lake, MI
Mon Jan 21, 2008
Jen, Yes, foreclosures are negotiable. That is if you provide the right facts with your offer and IF you are negotiating from your strengths.

The lawyers and lenders handling a foreclosure have paperwork facts in front of them about a specific home. If those facts are not correct, you and your agent need to include proof of why you are offering less for the property. If you simply submit an offer for 20 or 30 thousand less than the homes asking price and do not include proof the home needs these additional repairs, or that similar foreclosures sold for 20 to 30 thousand less that they are asking in the same neighborhood you've wasted paper.

Another alternative to foreclosures would be homes that are being offered as a short sale. These usually require less repair because they are still occupied or recently vacated and the owner has not taken out their frustrations by trashing the home or letting the pipes all freeze.

The Michigan Group has agents and a third party company specializing in negotiating with lenders over short sales.
Web Reference:
1 vote
Brendan Murp…, , Laramie, WY
Mon Jan 21, 2008
Frankly they are MUCH less negotiable in most cases. I am REALTOR in Laramie, Wyoming and have worked many foreclosures (that's what we're talking about, isn't it?) I'm on their side and sometimes they won't do much needed things I ask as they won't spend the $.
Example: I had a house listed with no carpet. They wouldn't replace the carpet even though it made it much less salable. Not just from the buyer's viewpoint but also the lender's; an appraiser would call such a home (at least in my market) "uninhabitable". This means the types of loans available that the home qualifies for have been hacked down to a small handful if any (keep in mind, the buyer too has to qualify for the same type of loan).
I'm sure they lost money over this decision to not put in new carpet. I also had asked to have the house cleaned (it needed it), they wouldn't pay for it.
A bank in my experience will not negotiate at all or very, very little. They WILL drop the price as the subject sits on the market. But the second a buyer says "we want you to repair this" or "pay for that" the bank laughs and laughs and quietly says "no". My advice is, don't expect to negotiate on ANYTHING other than price. You cannot get most banks to do things, things lead to liens and liabilities and/or paperwork. Just figure out how to pay for x yourself and then hack x off the price and offer price-x or whatever price makes you feel satisfied. Hope that helps!

Brendan Murphy
Broker, CRS, GRI, ePro
Raving Real Estate
Laramie, Wyoming
1 vote
Linda S. Cef…, Agent, Franklin, WI
Mon Aug 3, 2009

In addition to the previously stated great advice, I would just like to add that it depends on what you are asking for.

There are certain things that may be wrong with a home that make it unsaleable to anyone. A good example of this would be a fuse box versus circuit breakers. The only exception would be a 100% cash buyer and even then, the buyer would not likely be able to get home owners insurance and that would be quite a risk.

There are other such negotiable items that the mortgage holders will address if presented in the correct manner.

Linda S. Cefalu
0 votes
Meagan Kempf, Agent, Manistee, MI
Mon Jan 21, 2008
I agree with what the others have said - each bank varies tremendously in how they handle negotiations on foreclosures.

Two suggestions:
1. Definitely have a home inspection, as this may reveal items that warrant a reduction in price and/or major issues that you wouldn't otherwise be aware of.
2. In my experience, it seems like banks are more willing to negotiate on properties that have been on the market for a while, much more so than a newly listed bank-owned home.

Meagan Kempf
Coldwell Banker ALM
Manistee, Michigan
0 votes
Sylvia Barry,…, Agent, Marin, CA
Mon Jan 21, 2008
Truth in Real Estate - everything is negotiable (disclaimer, almost everything). Bank Owned is no exception - call your Realtor to discuss.
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more