Profile picture for valleyole

Making an offer on a foreclosed home 10 days before it goes to auction

I'm considering making an offer on a foreclosure property in the country in southern MN.  The property has been on the market for ~6 months, originally listed at 290k and now sits at 225k.  It is set to go to auction in two weeks, with an initial bid of 100k.

Does that price give an indication as to what the bank is willing to accept?  This close to the auction date, is the bank more willing to unload the property?  My thought is to basically split the difference and offer ~160k, but don't want to make too low of an offer where it is ignored completely.

The property is in decent shape, needs appliances, new carpet, paint, etc.  It is also in the country, which makes finding comparables difficult, but it also makes me think that there is a much smaller pool of buyers.

Yes, before everyone asks, I am working with a Realtor, but I wanted to get advice from the collective group as well.  Any thoughts/insight is greatly appreciated!

Regards,

Ryan

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 09 2010 - Minneapolis
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (9)

Profile picture for valleyole
Thanks for all of the advice.  Unfortunately the day I decided to finally make an offer, another party decided to do the same.  Ultimately I put together an as-is offer for the full asking price, but the other offer was accepted.  Of course I don't know exactly what the other party offered, but the timing just wasn't right for this property.  Back to the drawing board!
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 23 2010
So tell us....What did you do?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 22 2010
You can check zillow to see what is the market value of the property and make an offer around that together with proof of funds, if the listor is good enough sale can be postponed and you might have a chance on it
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 16 2010
If this is not too late....

Treat it like any other real estate transaction.  Make your offer for what you are willing to pay.  Just don't set your heart on the property in case your offer is not accepted.


Banks have BPOs, Broker Price Opinions, performed several times from different Realtors, and have a good idea of the market value of the property.  Your Realtor should be able to give you an accurate analysis of the property, and what to offer.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 16 2010
Auctions with opening bids generally have a reserve price that needs to be met. The reserve price is typically 70% of the current asking price.

Which in this case is $157,500.

An offer at $160,000 stands a reasonable chance of acceptance.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 10 2010
If opening bid is $100K, make an offer that you feel comfortable with above that price. 10 days is not a lot of time but it is possible. The offer will have to be enough for lender to be willing to order trustee to postpone sale date. The key to this will be for the listing agent to get this offer to the bank promptly but there will be no guarantees within 2 weeks of aution date. If you are going to make an offer, do it soon.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 09 2010
Profile picture for valleyole
Michael/Aaron,

I appreciate your response.  Unfortunately I don't know the specifics of the auction, other than the date and the minimum bid.  I can only speculate that the 100k is the reserve bid, but don't know that for sure.  I will try to get more information on the auction.  Michael, we probably are looking at the same property.

Hypothetically assuming that 100k is the reserve price, in your opinion, would a 160k offer be ignored from the bank?  I've never made an offer on a bank owned property, and more than anything I guess I'm looking for advice on how to toe the line between getting my foot in the door (in order to get accepted or get a counter offer) and being completely ignored.

Thanks again!

Ryan
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 09 2010
One thing your agent should check is if there is a reserve price that the lender has set for the auction. The $100,000 figure isn't necessarily the reserve price. I've seen properties with $5,000 opening bids that had a hidden reserve of quite a bit more. And if the reserve isn't met, the home is relisted onto MLS.

If you end up attempting to buy the property at auction (as opposed to making an offer now - and they will accept offers up until the auction if you find their 'magic number') remember there's usually a 5 percent buyers fee. So take that into consideration when bidding.

I found a similar (if not the same) property that's coming up for auction in Southern MN. The current price is $225k and the tax value is $322k. If you could get the property for what you intend to offer, I think you would make out like a bandit. Just don't get caught! Good luck.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 09 2010
None of us can make recommendations based on so little info.  Is the auction a reserve auction - i.e. do they have a minimum that they will sell it at?  If they do, then the $100k start price is meaningless and was likely set to get people to bid.  Auctions are dependent on more than one interested bidder to be successful.


There are no solid rules of thumb because each property and each sale is different.  If you like it, make an offer on it now at a price you are willing to pay.  If they say no or you can't come to terms, you'll have a 2nd shot at the auction.

At the end of the day the only people who can offer qualified opinions and suggestions are the ones that know the specifics of your situation and that of the property - the rest of us are giving you thoughts on less than all the information and from a position of ignorance.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 09 2010
 
Related Questions
At what point is a short sale offer supposed to change to "pending" status?
Profile picture for Chad Banken
Latest answer by Chad Banken
April 18 | 2 answers
Limited Brokers License MN
Profile picture for J.D. "Dan" & Carol Weisenburger
Latest answer by J.D. "Dan" & Carol Weisenburger
April 17 | 8 answers
Why would HUD accept an offer $11,000 less than mine?
Profile picture for Lenny Frolov
Latest answer by Lenny Frolov
March 25 | 6 answers
Does realtor needs to responsible for thing she told that is not true on the property?
Profile picture for Christopher Block
Latest answer by Christopher Block
March 20 2012 | 15 answers
Can a bank after closing come back and request to remove appliances?
Profile picture for Michael Emery
Latest answer by Michael Emery
March 16 2012 | 7 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 5306 67th Ave N, Brooklyn Center, MN Home For Sale
    5306 67th Ave N, Brooklyn Center, MN 55429

     For Sale: $140,000

    • Beds: 2
    • Sqft: 1558
    • Baths: 2.0
    • Lot: 10125
  2. 7361 James Ave N, Brooklyn Park, MN Home For Sale
    7361 James Ave N, Brooklyn Park, MN 55444

     For Sale: $184,800

    • Beds: 3
    • Sqft: 1668
    • Baths: 2.0
    • Lot: 10890
  3. 100 2nd St SE APT 404, Minneapolis, MN Home For Sale
    100 2nd St SE APT 404, Minneapolis, MN 55414

     For Sale: $629,000

    • Beds: 3
    • Sqft: 1820
    • Baths: 3.0
    • Lot: 61075