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Bank owned foreclosure price negotiation.

The foreclosed property is listed as $89,900. How much lower of a price do you think  the bank will accept?

http://www.zillow.com/homedetails/525-E-Brushy-Valley-Rd-Powell-TN-37849/41595316_zpid/
  • March 28 2012
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Answers (8)

A lot of listings in my area are stating, " Inspections may be used for informational purposes and not a tool for negotiations".  I usually tell buyers to keep repairs in mind when making offers, leave room for incidentals and make your offer accordingly. The bank does a BPO (broker priced opinion), meaning an agent goes out and does a soft appraisal based on condition and comparables. Then they price the property according to the BPO. Make your offer based of Value, Repair Costs and after repair cost value. Have an agent run some comps for you and see where your rule of thumb basis should be.
  • November 07 2012
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Did you have an inspection contingency as part of your purchase agreement? Bank owned homes are often sold 'as is' and are suppose to be priced to reflect their condition.

If your offer included an inspection contingency, then you could ask the bank for a price reduction. But don't expect that they will lower the price.
  • November 07 2012
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Can I still negotiate the price after inspection? I made a deal on a foreclosed house; but the inspection really tells me that a lot of work need to be done.
  • November 07 2012
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Profile picture for Ofe Polack
Seek the help of a buyer agent who is familiar with these type of properties.  Have a CMA done as the base for your decision.  Good luck!
  • March 29 2012
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Profile picture for PamSt House
We list a lot of Freddie Mac foreclosures and when the bpo ( broker price opinion) is done we give them a range of value.  Freddie often picks the lowest number or sometimes they list below the bottom of the range.  Their strategy is to have us market them at a price point where they will sell in 90 days.

We have seen many buyers low ball these and then loose the property.  Buyers need to understand that the list price is already discounted! ...so my answer to the ? is:
there is not an automatic % to offer. if a property is way under priced there may be multiple offers that all go over!!
  • March 29 2012
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Profile picture for Rfranks1
Ask your Realtor to provide you with recent sales that are similar to the property that you are interested in.  If there are recent sales that were also foreclosures, you would then take into consideration the condition of the property as compared to the other sales.  You also want to consider if you will be requesting any concessions and th length of time the property has been for sale to help determine the appropiate price.
  • March 29 2012
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Ms. DeBruyn has execellent suggestions.  We recommend the same things to our clients.  In addition, we suggest having a title search performed to see what liens must be paid at closing.  You can then estimate how much money the bank and other lien holders must have at closing to make the deal work.
  • March 29 2012
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Banks get appraisals.  They wont go below the appraised value if they dont have to.  Speak with your Realtor.  See what its worth. See how long its been on the market and the condition of the home. People think forecloswure = give away and thats not true. In many cases the banks are telling the list broker what to price it at.  You need to dig a bit deeper and ask your broker to do a little research.
  • March 29 2012
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