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How much to offer on foreclosure!?!

I am very interested in a 2100sq ft ranch with 4 beds two baths a full basesment and 2.5 car attached garage. It is a foreclosure property. The city assessor website shows that it is currently bank owned. The last assessment by the city while the property was in good shape was $148,000. It is the nicest looking house on it's block. When the title changed to the bank it was in the amount of $123,000. The listing agent has the property at $134,900. It needs some TLC in the way of carpet, paint, appliances and windows in the sunroom. The roof and all other windows are quite new. The basement is in decent shape but the flooring is all messed up and would need to be redone. Looking for a deal I was thinking to offer right around the ball park of 94,000 to 98,000 as my opening. Which falls into 70 to 73 cents on the dollar. Can anyone align my thinking if i'm off or please affirm if you think this is a good opening offer.
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March 11 2010 - Oshkosh
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  • DYeh
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hi The bank has no idea about the conditions of the property. They depend on the appriasor, and the listing realtor's estimations to set a listing price. In your case, your listing price had been set. The bank can only lower their prices base on a calculation formular.  Which bank own this property ? Typically, the bank keeps the price unchange for the first 4 weeks. They will not accept any thing less than their listing price within the first 10working days. After 4 weeks, they will lower the listing price, and accept offers discounted by ~4% of the previous listing price. They will do the pricing adjustment by every 2 weeks.  Patience is a key to purchase REO property. Also, All REO sales allows 3% closing cost assist (not first 10days). Don't forget to take advantage of the closing cost assit. They will not accept offer outside their formular, and time frame.  These are just my experinces with a couple banks. good luck!
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March 11 2010
BargainhunterX, this is a great question.  Look at how long the listing has been on the market.  If there is only cosmetic work to be done, don't look for the bank to toy with such a low offer.  In my market, the banks rely on local agents to do a BPO or Broker Pricing Opinion.  Basically this is a mini appraisal done using comparable properties within a certain proximity.  I do hundreds of these and know that the banks go by what these BPO's determine.  Usually, unless the home is destroyed (which would in turn bring a lower, more reasonable price), the banks try to market these homes within the pricing ranges set by the local current market.  Yes, I am sure they will try to make some extra money upfront, but as time goes on, these banks do want to sell and will then seek to take offer's outside the current market conditions.  REO doesn't always equal lowball offer.  Also, just a side note, they like owner occupant buyers rather than investors.  Happy Hunting.
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March 21 2010
 
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