Home Buying in 02726>Question Details

Sally, Other/Just Looking in Warren, RI

The list price on the foreclosure I'm looking to put an offer in on is $180k. How low is too low to offer?

Asked by Sally, Warren, RI Mon Nov 14, 2011

It's in a nice neighborhood, and has a fenced in yard with a nice deck(there WAS a pool, but it's gone now- deck is cut to fit the pool.. what a shame). The 2nd floor needs a considerable amount of work, as well as the kitchen is still in the 80's. Dark colored woods throughout the house except for new hardwoods on the 1st floor. The listing has been expired for 6 months now (but still on the market, pictures have snow!) The listing agent is really not on his game. The house foreclosed over a year ago. The property comes in at 163k on zillow, but I know that doesn't hold a ton of value since it's based mostly on sq. ft. etc. It's on .39 acres 1244sq. ft. Thoughts on what is reasonable to offer for this house?

Help the community by answering this question:


No offer is too low.

Worry more about the upside: What offer would be too high? The answer: Anything above the fair market value of the property.

What you need to do is determine its fair market value. Then offer no more than that. Probably offer less. As you imply (you're more delicate in such matters than I am), the Zillow number is worthless.

What you've run into with the listing agent is pretty typical. Some agents who handle REOs do little more than put the listing (and usually one poor-quality picture) on the MLS. (Others--and I know some--do a lot more. But your experience is more the norm than the exception.)

So: Get your own agent. Find out what the property is worth. Make sure you factor in needed repairs. Then make an offer no greater than its current value. Probably offer less; your agent can advise you on strategy.

Hope that helps.
2 votes Thank Flag Link Mon Nov 14, 2011
Don Tepper, Real Estate Pro in Burke, VA
If you dont know the market and or dont have a buyers agent, you should not be buying any property, foreclosure or not.

If you know the market, know the work it needs and feel it worth what you are willing to pay go for it.

I Love the buyers who offer low don't get it and would of paid more. I also love the buyers who put in a high offer it gets accepted and then get cold feet and back out. Do you see a pattern here, its called human nature. You want what you can't have and when you can have it, you don't want it.
Web Reference: http://www.LouisWolfson.net
1 vote Thank Flag Link Mon Nov 14, 2011
Hopefully you are working with a Buyer's Agent. Have him or her prepare a Comparative Market Analysis (CMA) to compare the home to similar homes that have recently sold within the previous 3 - 6 months. A CMA will give you a fairly good idea as to an approximate value in today's market and should help you in formulating an offer on the property.

As for how low is too low an offer: you'll know when your offer is too low when the seller (or bank) won't accept it.
Web Reference: http://Lew.BestChoice.net
1 vote Thank Flag Link Mon Nov 14, 2011
In addition to some of the other advice already offered, I would be sure to look at local market data for similar homes to ensure you gettingyour foreclosure at a responsible rate.

Be sure to check online tax records for the property to see how the town/city values the property. This in combination with the market value and asking price should provide a strong direction on what to offer.

Finally, your purchase price will ultimately be determined by what you feel most comfortable paying, based on what you plan to do with the property. For example, if looking to rehab and sell for profit, you will want to make sure you pick up the property for the least amount possible. Whereas if this home is for your personal use, you may pay more of a premium at the auction to secure the property.
0 votes Thank Flag Link Tue Mar 3, 2015
Consider working with a Buyers Agent to represent you. They can do a market analysis of the neighborhood to give you a good idea of what the market is typically asking for price of "like homes"
0 votes Thank Flag Link Mon Feb 16, 2015
Did these answers help? Do you need further assistance with this inquiry?
0 votes Thank Flag Link Fri Feb 13, 2015
did you place an offer on this property?
0 votes Thank Flag Link Fri Dec 27, 2013
I recommend a complete home market evaluation. We do provide these free of charge please call 508-644-8995 or check out new evaluation website http://www.OnlinePropertyValue.com for estimated value report.
0 votes Thank Flag Link Sat Oct 19, 2013
You can check its estimated value instantly on http://www.OnlinePropertyValue.com also no cost or sign up required.
Hope this helps
Denis DaSilva-Broker CDPE, LMC e-Pro
Managing Partner | reavolv real estate | Website: http://www.reavolv.com
phone: 508-813-6875 | email: Broker@reavolv.com
Broker License for Massachusets and Rhode Island
0 votes Thank Flag Link Thu Oct 3, 2013
As mentioned Sally, you need a buyer agent to help you determine the price. There is no cost to do so and is the best way to determine your offer. Banks hire agents and appraisers to help them price the home and they often are not local and so often price them very high or low, there is no formula to use. The example I use with my buyers is: If someone told you to offer 10% under asking price ( which seems to be very common advice from friends, family etc ), what if the property was priced 25% too high? Or worse, what if it was priced to sell and 10% under market value? As with anything, get some professional assistance from an agent familiar with REO process since it is so different in many ways from a regullar transaction. It won't cost you a dime but will make your life much easier, ensure you don't overpay and help you protect yourself.
0 votes Thank Flag Link Wed Nov 23, 2011
You need a CMA for properties in Somerset with the same characteristics as the one you want. A CMA is like an appraisal but done by a real estate professional rather than an appraiser. Once you have that, you can adjust for condition, location, etc. I'd use a real estate professional though. They can save you more than a commission in time and headaches.
0 votes Thank Flag Link Fri Nov 18, 2011
Don't use zillow as your only source to value the property. You really need current comp's.
If you send us the address we can give you the value but without it it's all speculation.
There might be a reason the listing agent is not on his game with this property. The bank who foreclosed on it might be completely disorganized and selling this home therefore near to impossible. If you are taking a loan on the property you will want to do some serious due diligence on the property. You will also want to seriously educate yourself on the foreclosure process. It's not for the faint of heart.
Web Reference: http://territory.com/
0 votes Thank Flag Link Tue Nov 15, 2011
All good advice so far. Zillow Zestimates are worthless because they are purely based on computer-generated data and are not property specific. You need a local buyer agent to represent you and negotiate for you. Make sure your agent views the property and provides you with a CMA. Discuss all the details and take a solid self-analysis to determine just how badly you want this property. Remember that a bargain that needs more investment than the property is worth is no bargain.
0 votes Thank Flag Link Mon Nov 14, 2011
Definitely don't rely on Zillow.

Understanding fair market value is the first piece of tendering an offer. Hopefully your working with a Buyer's Agent who can provide you with sold data for similar homes. Whats you know what fair market value is than its up to you to decide where to start the negotiations. If the home has been on the market for a long time then it would not be off base to try and start negotiating 10-20% below fair market value.
0 votes Thank Flag Link Mon Nov 14, 2011
You can offer whatever you like; however don't rely on online values as they may be inaccurate nor updated; rather review comps with your agent, recently sold similar properties in the immediate area, see what the data suggests and go from there. Keep in mind that if the property is priced on target, or slightly below, multiple offers may occur...
0 votes Thank Flag Link Mon Nov 14, 2011
Don't rely on an estimate of value from Zillow!

Estimate the value, deduct what you feel you'll need to put into the property to bring it up to date and make an offer based on that figure.
Web Reference: http://www.golftobeach.com
0 votes Thank Flag Link Mon Nov 14, 2011
It sounds too low!
But from where I am, it could be anything.
You too.

You need to have a Realtor do a CMA to determine the Market Value.
Real numbers backed by logic and reason.

Recently, the emphasis on Appriasals has made this more important:
If you offer too much over Market Value, you will not be covered by the Appraisal and that will create a whole bunch of problems for you.

Good luck and may God bless
0 votes Thank Flag Link Mon Nov 14, 2011
Whatever you want. If its too low I doubt you will be offending anyone since a bank owns it.
0 votes Thank Flag Link Mon Nov 14, 2011
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