Profile picture for user2690948

How do you know what to offer for a forclosed property?

3 bedroom ranch 2 full bathrooms no appliances.
  • June 11 2013 - Danielson
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Answers (9)

Profile picture for Pacita Dimacali
Too often, folks are focused on the total price --- you're hesitant to offer $148K, and would prefer to offer $146K.  That very small difference in price will hardly make a dent in your pocketbook, but could cost you the sale.

And if you wait to buy, note that mortgage rates are rising -- so waiting would cost you more in terms of mortgage payment, than the $2K you might save on this property

Have you prepared a comparison of what it will COST TO BUY. And it doesn't mean just the sale price -- but rather, how much cash you need to close, and what your monthly payments will be.

SEE: Buying a Home? The COST is more important than price for sample calculations

Most markets are now seller's market wherein you may encounter multiple offers at over list price

And no....banks will most likely not give you credits for closing costs.
  • June 15 2013
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It is very critical for you to understand your current market conditions. Every market area is different. There are few factors you want to consider when writing an offer such as how long the home has been on market for sale, how many offers does the current seller have (1,2 or multiple etc), has the seller been in contract before, what happened to that deal, what are other homes selling for in the area, how long is it taking for those homes to sell, what is the current condition of the home, what is the cost for structural damages or cosmetic work if any etc. You can check for these things visually while walking thru home, or ask listing agent and check if they have any reports or disclosures upfront. Its best to have an agent represent you and walk you thru this so you can make the highest and best offer possible. Offer what you think is worth paying for the home and makes sense for your financial situation. However due to the low inventory of homes in the market, you may want to write your pros and cons about what your looking in a home to decide what your willing to live with or with out as its hard to find all the qualities in one home today.
  • June 15 2013
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Again, have your agent prepare a market analysis to determine what its market value is today, based on its current condition.  That is what you need to know. 

It's assessed value may or may not have any relevance to its current market value.
  • June 15 2013
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Profile picture for user2690948
I was told to offer 148000.00 for this house and ask the bank to cover the closing costs. The house is assessed at 146500.  I  was thinking more on the line of 146000, offer and the bank cover closing. Does this sound reasonable?
  • June 15 2013
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Hi - 

What it sold for 7 years ago has no bearing on its current market value.

Have your agent prepare a market analysis to determine what its market value is today, based on its current condition.  That is what you need to know.

Beware of agents answering from out of state who are not familiar with the Connecticut market area.  Their advice may or may not be relevant.
  • June 14 2013
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Profile picture for user2690948
The house sold 7 years ago for 227,900. It is now listed for 149,900. It is in very good condition. It really only needs to be painted inside and new carpeting in the bedrooms. It is only cosmetics that really need to be done.
  • June 12 2013
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Profile picture for Michael Mei
You can have a Realtor compare the house based on last sold.  I would offer under the last comparable sold like 15% to accommodate for repairs...Foreclosures are sold "as is".
  • June 11 2013
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What is the market value of the home based on its current condition?
Are there multiple offers?

Is it new to the market or has it been on the market for 30 or 60 days or longer?  The longer a bank-owned home has been on the market, the more they may be willing to negotiate.

All these factors need to be considered in order for you to determine the proper offer price.
  • June 11 2013
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You offer 25% under the last comparable property that sold in the area. You can go lower however, banks tend to want to stay within that percentage range or higher depending on the condition of the property and how much the bank has into the property.

In the final analysis the bank usually tells the buyer what they are willing to take for the property.If you can find out what the property sold for initially and the loan amount you can usually figure out how much the bank has into the property. They don't want it but their job security is dependent upon losing the bank the least amount of money.

 
  • June 11 2013
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