Home Buying in Chicago>Question Details

Dan, Home Buyer in Chicago, IL

Low Ball Offer??

Asked by Dan, Chicago, IL Tue Oct 28, 2008

I live in the suburbs of Chicago and I am a first time home buyer that would like to buy a home in the next couple of months. The house Im looking at is a bank owned forclosure listed at $385 and the Zestimate on Zillow is $450. Is it crazy to think that I could offer around $300-325 and the bank to accept? I was hoping that since the house has been on the market for about 5 months they would at least comback with a counter? How long do banks hold homes before they start to reduce the price? My reasoning is that I would offer 10% below asking plus all of the kitchen appliances and washer and dryer are gone.

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Dan, as the others have pointed out things are crazy right now. One of my clients waited months for a response from the bank on his offer, only to see the listing cancelled. The listing agent finally returned my calls to say the bank decided to sell the home in an auction. Another client got a good deal (about 20% off market value) but then financing fell through. Then the bank selling the home decided to give him financing and we helped negotiate a decent interest rate. The key is determining what the property is worth right now, then making a good offer you can live with, perhaps 15-20% off of fair market value. If it truly is a great deal, don't be greedy as you only give others the chance to outbid you as time drags on. Right after I closed on the foreclosure I live in (11% off list, 25% off market value), I got a call from another bidder who told me I outbid them by $3,000. Another trick you can try is check what the same bank is taking on other homes in Chicagoland. This involves some extensive work by realtor but may be helpful if you get lucky. Good luck!
Web Reference: http://www.1sthomegroup.com
1 vote Thank Flag Link Wed Oct 29, 2008
Bank foreclosures are sold as is. Work with good buyers agent investigate the entire sales history of the home submit an offer. If all is true with that much equity there could be a bidding war on the property. UNLESS a realtor comp's the home, Zillow other sites great are only used as a resource however not accurate majority of the time.
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
1 vote Thank Flag Link Tue Oct 28, 2008
Can't hurt by trying. I can tell you that a bank may counter or they may be waiting for their asking price. You need to make the first move and see what the response is and then keep the dialogue going.
In most cases a bank will counter your offer at $1000 lass than asking and wait for your next move. Do not be insulted, just keep it going. You will arrive at a price that both sides will be happy with. If not move on.
As far as the Zestimate, Zillow uses sales from 6 mths ago and therefroe the price may not be a true indication of current market value.
If you are working with a Realtor, which I hope you are, (if not I can refer one in that area to you), have them prepare a CMA to give you the MOST current selling prices. Try to keep within 1 month. Base your offer and final price on that with room to increase if this is THE HOUSE. You may feel you are paying too much,however, unless you are going to sell within 2 years, you will not be. And also be aware that the cost to you is approx. $6. per 1000 mortgaged to get the home or not. Also make sure that if you walk away that you would not regret it later on.
And that's my story.
Good luck and may the blogs be with you.
1 vote Thank Flag Link Tue Oct 28, 2008
When buying a foreclosure you really should have a buyer broker who is experienced in foreclosures who can guide you, first you should be pre approved and submit the pre approval letter with your offer, make sure you do all inspections before making an offer, the house is sold as is and teh bank will not renegotiate after the inspection if you find anything, dont ask the bank to fix anything, dont add any contingincies and be ready to close in 30 days. as far as price 10% is a good basis however the agent should be able to give you any insiode scoops in that area. in most cases you can negotiate the buyer broker contract so that it does not costs you anything out of pocket as they get paid by the listing broker at closing. good luck with your offer.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Tue Oct 28, 2008
First off never use Zillow the numbers are always way off.
1 vote Thank Flag Link Tue Oct 28, 2008

First, toss out anything that zillow says, second, get ready for a 3-6 month process of playing the foreclosure game if not longer. Not only are you dealing with an overwhelmed banking system that is playing catch up to the massive amounts of foreclosures or short sales that they have on their books but also to a Real Estate system that is learning on how to deal with all this as well.

Be very careful with all these so called 'Foreclosure and short sale" experts. This is all still new to them as well.

If you have a lot of time on your hands then play the foreclosure game and you may get a good deal. If your looking to buy and move into a home in a shorter time frame like 1-3 months then find a nice home that is not bank owned (Yes, Their is a lot of them out there still) and make an offer after you have had a Realtor run the comps and done some homework for you.

Good luck!
0 votes Thank Flag Link Tue Oct 28, 2008
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