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If you are interested in purchasing a foreclosure home, is there a buyer formula to use for a offer?

What would be an offer that would be considered for a list price of 595,000?  I would like to offer 530,000 or a little less depending on if I have to pay closing costs.  The home has been on the market since the end of August '09.
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March 15 2010 - US
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Answers (5)

Rick, I do agree with this.  CMA's are a great start.  Most of the REO broker list agents in my area are smart enough to not over-price to an extent.  This also goes along the lines of having a trusted buyers agent.
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March 21 2010
My very first thought when I see questions like this is that list price is just not important.... it could be way off, a little off or right on.  So, making an offer based on list price is not a good approach.  For example the home could be overpriced by $100,000, which would creat at least a disadvantage duing the purchase.

Better to start with a very good CMA and market balance analysis.
Then think about the offer strategy.
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March 21 2010
Frankly, it really depends on the area.  In my area an offer of 530k on a listed REO at 595k wouldn't even get a counter.  I think during these times, Agents are smart enough to advise banks to list accordingly and not go overboard.  I also do BPO's, which banks use in determining the list prices and market values for homes in the foreclosure process.  They go by local area comps always taking into consideration the condition, location and potential need for repairs or renovations.  They use local agents, like myself, when determining price ranges.  To me this would be an extremely low offer but the upside is that the home has been on the market.  Have there been any price drops during this listing period?  If the price has been dropped aggressively then keep an eye on it and attack when the time is right.  Happy Hunting.
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March 21 2010
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Georgia
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March 15 2010
I would first try to find out if there are any other offers on the property.  If not, give it a shot, you never know what the banks bottom dollar is.  They will probably counter offer you, but thats part of it.  I would suggest you ask them to pay your closing costs and a home warranty, that way you are not paying for those things out of pocket.  If there are other offers, you will be competing and a really low offer may sometimes but you out of the race.  Wat state are you in?
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March 15 2010
 
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