Obviously their asking price would already be less then the potential value of the home (assuming homes were valued the same as they were in 2004), but is it likely that they would entertain offers 10-15% less?
Obviously their asking price would already be less then the potential value of the home (assuming homes were valued the same as they were in 2004), but is it likely that they would entertain offers 10-15% less?
Doubt it, they need to sell the home for exactly what is owed on the mortgage and not a penny less otherwise they have to go after the previous home owner for the balance owed.
Good luck
I just bought 3 properties and I wouldn’t hesitate to make such an offer. It’s a buyer’s market out there glutted with repos and banks are under a lot of pressure to dispose of those homes. Just like any other sale, the bank is free to negotiate with you and you can always raise your offer.
Not usually. But its worth making an offer. The worst they can do is say no!
rong tu all abuv.
Banks now tri tu get rid av forkloesed houses bi kut pries bout 25% belo $ oed on the morgage that krashed.
But even that is wae abuv a reesunabel “value” for the hous…30% 2 hi.
Thats wi hous prieses keep going down…pries is 2 hi, but most sellers refuze tu loer pries. Oenlee banks loer pries, but em hav limits.
If yu wanna no a reesunabel pries, yu gotta go bak B4 the hous bubbel…1995
Sometimes.
Here’s how it works:
Prior to putting a foreclosed property on the market, the bank gets a BPO–a broker’s price opinion. That’s sort of like a CMA (competitive market analysis; it’s performed by a real estate agent). BPOs, however, are sometimes done quickly and are often inaccurate.
Still: The bank knows how much it was owed. And now it has a BPO that, in theory, tells how much it’s worth in today’s market. And usually the property will be put on the market close to the BPO, regardless of how much was owed. So, in my area, there are homes that sold for $500,000 in 2006, with 100% financing. So $500,000 was owed on the property when it went into foreclosure. The BPO comes in at $350,000. The bank then lists the property for around $350,000. Maybe a little more, maybe a little less.
Then most banks have a pretty set formula regarding price reductions. For example, they might reduce the price of that $350,000 house by $10,000 every 45 days until it sells. And they are willing to negotiate a bit on the price. So, in our example, if the house is priced at $350,000, an offer with a decent chance of being accepted is probably between $340,000 and $360,000. Sure, they might take less. And if it doesn’t sell at $350,000, then they reduce it to $340,000, and the “acceptable” offer range might be $330,000-$350,000.
So, 10%-15% might be stretching it a bit. Still, it’s worth a try. However–big caution–have your own agent do a CMA on the property. As I mentioned above, BPOs are not always accurate. I’ve seen plenty of foreclosures that are still overpriced. The example above? In the neighborhood I’m thinking of, the REAL value of the house is closer to $325,000, not $350,000. So, if you offered $330,000 on that $350,000 house, you’d still be overpaying.
In summary: Get a CMA from your own agent. Certainly don’t offer any more than the property’s worth. And feel free to offer less, recognizing that the bank is hoping to sell for close to whatever the current list price is. Still, the bank might reject your offer today and accept the same amount next week.
Hope that helps.