Is it rude to offer a price that is lower than the asking price on bank owned property? If they are asking say $250k and the trust deed was $50k

Asked by Cheryl Taylor, Avenal, CA Sat Aug 28, 2010

would it be wrong to offer $150k for the property?

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14
Don Tepper, Agent, Burke, VA
Sat Aug 28, 2010
Rude?

That word doesn't exist, especially when dealing with a bank-owned property and an asset manager.

Besides, who cares? If you're waiting for a dinner party invitation from the asset manager, I've got some disappointing news for you.

Look: Forget the asking price. Yes, I said forget it. Forget what the trust deed amount was. And, though you didn't ask, forget what the tax assessment is. Forget what the house was appraised for when it was last sold. None of that matters.

The only thing--the ONLY thing--that matters is: What is the house worth today, in its present condition? That's it. It's really that simple. You determine that number. A good Realtor can help. Then you pay no more than what it's worth today, in its present condition. Perhaps you offer less. Your Realtor can provide some strategies for making offers.

That's how to do it.

Hope that helps.
1 vote
Aaron Schrei…, Other Pro, Leavenworth, WA
Sat Aug 28, 2010
Make an offer to get the ball rolling. For a regular listing is fairly typical to underbid the asking price. Depending on the situation the bank may be willing to negotiate. Good luck!
Web Reference:  http://www.amsinspection.com
0 votes
No Name, , Seattle, WA
Sat Aug 28, 2010
Cheryl, take the first step and just make the offer. You'll find out what the answer is at that point.

Suggestion: include a narrative as to "why" you're offer is at your price. Make it personal. even asset managers are people, so if yoiu have a romantic reason for being there (e.g. close to family / wher eyou've always wanted your kids to grow up/etc) then tell them.

Worst case is they'll say no.

I hope that helps.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sat Aug 28, 2010
Cheryl,
This is definitely a case where you need eyes on the scene doing as much legwork for you as possible. I've worked with Relocating buyers taking pictures, getting estimates and doing similar work in my area. Chances are there is an agent nearby this property who would be qualified and willing to do the same.
If you are able to pay cash, that's great, but consider an FHA 203K Rehab loan. The Streamline version limits your available rehab amount but the standard may still work. In either case, I agree you need to do all due diligence to insure as few surprises as possible, but keep in mind, there will always be some. Best of luck.
0 votes
Cheryl Taylor, Home Buyer, Avenal, CA
Sat Aug 28, 2010
Thank you all for your answers. I am having a hard time because the house is in an area where I find no recent sales after an internet search. It has sat for over a year and is in an unfinished condition. I would have to put money into finishing the house, so want to make sure I have enough money left over to pay for all the work needed. I would pay cash, no finance possible I suppose, as like I said, it is not finished in construction. I want to go see it first and see how remote it actually is. it is many miles from where I live now and I have to make time to spend a few days checking it out. I just dont want to get on the wrong foot and burn any bridges in case I absolutely love it.
0 votes
Bill Eckler, Agent, Venice, FL
Sat Aug 28, 2010
Cheryl,

Rude.....NO!

Unacceptable....possibly!

Only the banks know what they need to get out of a property in order to not lose their shirt. It's very common that amounts representing less than the asking price are offered and banks commonly accept some of these offers.

The amount of time the property has been on the market and the number of price decreases may be an indication of the lender's willingness to negotiate.

Best wishes,

Bill
0 votes
Dan Tabit, Agent, Issaquah, WA
Sat Aug 28, 2010
Cheryl,
Sometimes it’s rude not to make an offer. Your strategy should be based on what the home is worth to you. If you love it, can't imagine life without it, make an offer that has a good chance of securing the home. If you could live in it for the right deal, offer less and be prepared to not get it.
The Bank's obligation is just like any seller, get the most they can. It has nothing to do with being rude or polite, it’s just business.
0 votes
Jirius Isaac, Agent, Kenmore, WA
Sat Aug 28, 2010
Nothing is wrong, but as has been stated, it is probably a waste of time. If you want to only pay $150, wait & see it is goes down to $170 before it sells, then make the offer.
0 votes
Kat Miller, Agent, Charlotte, NC
Sat Aug 28, 2010
Most if not all banks have done their homework in pricing the home under current conditions and market. You can offer $150K but chances are very good they will just say no. They are not personally involved. It does not matter what anyone has paid for the home in todays market. What you need to do is get a good area agent who can advise you on current market price
0 votes
Chris Greenw…, Agent, Fort Lauderdale, FL
Sat Aug 28, 2010
Remove the word rude, the asset manger on the other side of the transaction has a Broker Price Opinion in mind that is close to market value, consider what it will cost to get unit in order on wholesale basis even if it needs new appliances,. Shrewd investors seem to be coming faily close to asking price, it never hurts to submit an offer as you might get counter from bank if its to low.
0 votes
Dp2, , Virginia
Sat Aug 28, 2010
The current market value is more important that what they paid for it or its list price. You can get a good idea of its current market value via the recent, sold comps; and you can get an even better idea via an appraisal. You should base your offer on the comps, and negotiate it down (if necessary) based upon the appraisal results.
0 votes
Scott Godzyk, Agent, Manchester, NH
Sat Aug 28, 2010
Cheryl i agree with bank owned it is not personal, the seller isnt going to throw the listing agent of their house for bringing such and offer as an owner occupied house might. Before making any offer you need to assess what the house is worth in todays market and base your offer on that, never base your offer on an asking or listing price.
Web Reference:  http://www.ScottSellsNH.com
0 votes
dave, Agent, Charlotte, NC
Sat Aug 28, 2010
It is a double edged sword. If you offer to low the bank may just refuse you comletely. Then, when you come up (if you dedcide to) you ahve laready started on the wrong foot.

On the other hand if they counter yo and begin the negotiating process then you know you either were not too low or the home has been sitting for a long time and they are motivated to move it.

What you need is a REALTOR who knows what the market is bearing there. Ask them how long it has been on the market? Factor in cost fo repairs to the house. And then go from there....

Good Luck
0 votes
The Cascade…, Agent, Issaquah, WA
Sat Aug 28, 2010
It is not rude, but possibly unrealistic. The banks are typically selling closer to market value these days. They may simply counter back or not respond. Unlike a person however, they will not take it personally.

Good luck!
0 votes
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