I found a foreclosure home I wish to buy. Lender wants a set price, and I am willing to pay list [very good

Asked by Curtisleblanc, Pompano Beach, FL Fri May 9, 2008

bargin]. But, I think lender should pay 6%.

Yet, my realtor says they might not. What gives-- is there mortgage crisis and don't banks want to unload properties?

How do I broach the 6% with the selling bank?

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Steven P Wood, , Jupiter, FL
Sat Jul 26, 2008
Hi Curtis,

Ute's answer is very good and I agree with all she has to say.

I want to add that Really Good Bargains will attract Multiple Offers from Home Buyers AND Investors.

If you really like the Property, and, if you need 6% Seller's Concessions, be sure to increase the Offer by the 6% and a little bit more. Otherwise, that other Buye/Investor, with the same desires, will outbid you!

I have had many of the offers that my Buyer Clients have submitted, come in second, because some other buyer wanted the property more than my clients wanted the property. Needless to say, "Want" is defined in the Offer Price!

Best of luck to you!

Steven P. Wood, Realtor
Palm Coast Realty, Inc,
12300 Alt. A1A, Suite 209A
Palm Beach Gardens, FL 33410

Direct: 1-800-298-2566 or 703-851-6535

eMail: Steven_P_Wood@msn.com

Web: http://www.homepages.com/StevenWood1

Office: 1-800-298-2566
Fax: 561-625-0086
Cell: 703-851-6535

I am at Your Service for ALL of Your Real Estate Needs, Specializing in Jupiter, Juno Beach, Tequesta and Palm Beach Gardens !!!
Web Reference:  http://www.ByJoveMyHome.com
1 vote
Ute Ferdig, Agent, Newcastle, CA
Fri May 9, 2008
Hello Curtis. I am not sure why you think the lender should pay a 6% credit if this is a good bargain. If it's a good bargain, you may have to compete with multiple buyers and the bank will accept the offer from the buyer that will have the best terms and net the bank the most money. If you are certain that this will not be a multiple offer situation, then go ahead and submit your full price offer and ask for the 6% credit and see what happens. Lenders know how to counter offers and they will if they don't like your terms. Yes, you are right, this is a mortgage crisis, but some lenders don't seem to have caught on to that yet and the lenders try to get the most for their properties just like everybody else does. Their motivation to sell increases as the days on market goes up. If a property has only been on the market for a short period of time, the lenders are not necessarily in a hurry to sell. They know what the average days on the market is and they know what their bottom line is and when they are ready to bargain. Unless the property has been on the market a couple of months, they are not yet desperate no matter how many properties they have in their portfolio. If a lender prices a property competitively from beginning, you know you have a motivated lender. If their initial asking price is high, the lender is either unrealistic or unmotivated, neither of which is good for you as the buyer. Make your offer and see what happens. The lender can't respond to your offer if you don't make one. Good luck.
1 vote
Teddy Jagess…, , Wellington, FL
Wed Dec 2, 2009
Yes but on their terms. If you really like the house and it is a good deal why don't you offer 6% more and ask for it back in closing costs
Web Reference:  http://mypbchomes.com
0 votes
Juan A. Oliva, , West Palm Beach, FL
Sun Jun 8, 2008

Is called Seller Equity, Some people in trouble do to loss of job, or divorce are forced to sell and cannot make payments on their own, They would rather be aggressive in selling their home and salvage their credit worthiness.

In addition, Bank on REO or short sales will not only sell their inventory at attractive rates but will negotiate on seller consesions as long as the buyer is reasonable. It is done all day long.


Web Reference:  http://www.asapmortgage.org
0 votes
Margaret T.…, Agent, Conroe, TX
Sun Jun 8, 2008
You have some very good answers here. BUT Have all these Realtors dealt with foreclosures, I can tell some have not.
1st on these preforeclosures, the sellers can not afford to make their house payments so how are they going to pay your closing cost. Are we talking about Short Sales. Now that is another story.
Is your lender going to allow 3% or 6% closing cost.
On foreclosures there is an amount that the lenders agree to take, anything over and above that, often including the commission, has to be added.
0 votes
Juan A. Oliva, , West Palm Beach, FL
Sat Jun 7, 2008

Although your Realtor gives you his professional advice on how to sucessfully present your offer the final decision is yours, it is after all your money.

Banks are not in the Real Estate Business and want to generally unload bad paper Inventory as soon as possible, however some properties have Mortgage Insurance and lenders collect on those loans that had gone bad that were insured.

The are also some large banks that in either the process of folding or being taken or bought over by larger banks so the decision making is up in the air as to how much they loose and who takes the blame everyone wants to have a job when the smoke clears.

There are buyer controlled properties that are willing to be aggresive when selling their homes, If I were you I would rather deal with a seller that is motivated pre-foreclosure before the bank get's their hands on it.

I hope this helps you.

Web Reference:  http://www.asapmortgage.org
0 votes
Bill Eckler, Agent, Venice, FL
Sun May 25, 2008
We agree......knock the 6% off your initial offer
This way you are limiting the number of issues that might get in the way of a successful transaction.
Good luck,
The "Eckler Team"
0 votes
Margaret T.…, Agent, Conroe, TX
Fri May 9, 2008
I take it you are asking for the 6 points that a few lenders allow you to ask the seller to pay.
Well the seller really does not pay that you do you are just financing it - just as the seller does not pay all the commission You are. You are the one buying the house. REO homes = Bank Forclosure or HUD accept offers by what they want to clear - The offer needs to state that you want this help before acceptance - if not an amendment needs to be added ( it is preferred to do this way with most lenders) Stateing that the sales price is to be ajusted -----$'s and that the seller will pay ______$'s closing cost for the buyer. I always insert that the commission will be figured on the original price.
0 votes
Sandy, , Chagrin Falls, OH
Fri May 9, 2008
There are allot of details left out to really give you good advice. If you are offering say 100k on a home and the list price is 100k. that would be full price on the property. If you are also asking the bank (the seller) to pay 6% towrds your prepaids,points and closing costs then your offeris really only $94,000. Which would be $6,000 les then asking price. you aslo don't mention if you are in Multple offers on this home. typically there are several offers on bank owned homes. I Don't know.

Banks do want to unload the homes that they have on the market but they are usually already reduced and some times the the amount on the loan is more then what the property is worthmaking it a short sale.

I don't have the details needed to advise you. Alos keep in mind that the bank is paying the brokers commission too.
A side note to this is that the banks will take there good old time in getting back to your agent as well. You can't hurry the bank along they move at a snails pace and you better have at least a 45 day close or longer.

Good luck!!
0 votes
Mark Chovan, , Frisco, TX
Fri May 9, 2008
Is your Realtor the listing broker, or representing you as a buyer? When you say Lender do you mean the Bank holding the REO?

If you are a buyer the commissions should be no concern, as all you want it the house.
Web Reference:  http://www.bigdrelo.com
0 votes
Amal (ML) Ge…, Agent, Trinity, FL
Fri May 9, 2008
I would knock the 6% off of my offer and approach it that way. Ml Geots REMAX New Dimensions
0 votes
Barry C Hoff…, , Maryland
Fri May 9, 2008
I am quite certain that the bank wants to sell any house they can. Banks do not want to be in the home owner business. Banks want to make money lending money. The good news about dealing with a bank is that it is usually not an emotional transaction. Banks deal in figures. If the figures work to where they will make or loose what they conside to be tolerable they you may be able to strike a deal. There is no sense in worrying about a broch approach. " Put your offer in writting" and see what happens. If you loose the house because your offer was not strong enough then ll I can say is that you must not have wanted it that bad. On the other side of the coinb if you get it for your offered price then good for you and go celebrate. Your Realtor is most likely telling you to be aware that the 6% could spoil the deal for you .
0 votes
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