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forecloseure

when negotiating   on a floreclosed home how much leeway do you have in getting a lower price than what there asking. bank is asking  180,000.00 
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November 13 2010 - Sunrise
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ask your Realtor for comps re similar homes sold within the last 1-3 months...
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August 18 2011
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Linda -

I actually found that chart you posted helpful!

However, it still doesn't indicate how to price an REO or Short Sell offer in any specific area, even in Las Vegas Nevada.

Zillow's Research Brief from 1/13/10 indicates Median sold price of Foreclosures is 70% of Median sold price of non-foreclosures in Las Vegas, and that the median sold price to market value of foreclosures is 77%.  Where as with less distressed ratio of the housing market, the "historic" sold price to market value of foreclosures in Las Vegas was 91%.

At the time of the research brief, Zillow was indicating that REO's made up 74% of the transactions in Las Vegas.

Anyway, the 77% is not off of "list price" but "non-distressed" market value evaluation.

Thus one needs to do an assessment of market value, then they need to factor in about 23% off of that for it being a distressed property in a highly distressed property saturated market.
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August 18 2011
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August 18 2011
There is more to it than most think. Many bank owned properties many times are listed low to induce a multiple offer situation. Then the listing agent puts out the highest and best addendum. Many times the bank will get more than they would by listing higher and attracting a few lower offers. Also the buyers financial postion is criticle. Are you financing, How Much?,What is your down payment, are you a strong buyer. The banks don't want to deal with a weak buyer that may fall out half way through the process. You need a savy agent to guide you to a successful accepted offer and closing. I hope this will help.
Thank You
Suzie Marquardt
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August 17 2011
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I go with the what others are selling in relationship to the tax value in the market-tax value assessment is a free appraisal, it may not indicative of market value but it is constant and stable across the area.  For example, if it listed in New Hanover county and 70% of tax value I would be interested.  This will of course vary, but with market analysis you should be able to discern a ratio thats appropriate.
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August 17 2011

Stats 8/14/2011 for Las Vegas, Nevada
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August 16 2011

The short sale price just has to be $0.01 more than what the lender receive in foreclosure.

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March 07 2011

I would suggest locating several homes in the area and price range you want to pay.  It's difficult to say what a bank will accept as an offer.  Work with a buyers aAgent, such as myself and get comps of other homes in the area and submit yor bid according to the comps.

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March 07 2011
As a listing agent for the Banks I find the days on market are very important in the price a bank is willing to take and how long it has been since a price change.  I find the banks are very good about lower the price every so many days until it sells at that price some times with multiple offers when it get's low enough.  Of course I am talking the Phoenix market area.
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November 23 2010
Just depends on the comparables (homes sold last few months), list price doesnt really mean much. Some agents price a listing very low to get attention and get multiple offers in so it becomes a bidding war.. Hope this helps.
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November 23 2010
It depends on what they're asking compared to recent comparable sales in the area.  Sometimes they are asking $20k over "market value" in which case you may be able to get an accepted offer of $150ish, however is is common for the bank to have the asking price already lower than "market value".  If that's the case, you may need to offer $180k or higher to get your offer accepted.

I could go on and on with different ways to analyze, including time on market, cash vs. financed, etc...but the real answer to your question is "IT DEPENDS".  There is no one size fits all answer and that's why every buyer needs an experienced & knowledgeable buyer's agent to research and advise on each property individually. 
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November 14 2010
That is the million dollar question. Obviously, they are not going to sell the home at a 50% discount like many people think when writing offers on these type of homes. It never hurts to write an offer that is fair. Now, it depends if you really want the home. I would advise to give pretty clos to asking price if you really want the home. Why? Offers come in out of thin air. Our company has over 300 bank owned listings. Otherwise, I would start at 85-90% loan to value when wirting up the offer. Cash will always be king when doing these deals. The next best favorite will be conventional loans. However, I do see at times when they will pick an FHA loan over cash. It all depends who is on the other side for the bank.

Hope this helps you in making a good offer.
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November 14 2010
Hello Wattsisk,

In the Real Estate business we have a saying that "All real estate is local."  Which simply means, regardless of what you may hear about that is happening in other parts of the country is likely very different from what we are experiencing here in Las Vegas.  What the previous Steve is talking about may be rampant in Washington, but is not necessarily what is happening in Las Vegas.  Having closed dozens of Foreclosure sales in the last few years without a hitch, I can tell you that the incidence referred to is very rare.  In fact, I have not heard of it at all although I am sure it is bound to happen once in a great while.  In fact, I would be willing to bet that the occurrence of a clouded title in Southern Nevada is less than 1 in 1000.  So, let's not worry about bringing an umbrella when there is only one tiny cloud in an otherwise sunny sky, and no clouds in the forecast.

Now, with regard to your question about "offer leeway", the answer is a bit more scientific, so as to require a bit more lengthy explanation.  Consider the fact that this is one of the busiest years on record in Las Vegas.  This is due to the fact that we are seeing such ridiculously low prices - as low in some cases as back in 1985.  The result has been that investors are literally pouring back into the Las Vegas market from all over the world.  The effect on the market has been this; if a property is priced well (read that "comparable to other homes in the market"), it is going to receive multiple offers.  By that I mean that you may see as few as 3 or 4, or as many as 30 or 40 if the property is priced below that market.  I heard of one home that had 70 offers on it within 4 days of hitting the market.  This feeding frenzy has the affect of creating a bidding war, or as I like to call it "A mini auction".  I have seen prices get bid up anywhere from 10 to 30% over list.

On the other hand, if the property starts out on the market even a little bit above market, it may not get any offers at all.  Many Banks will not consider offers of less than list for the first week or so, although a rule of thumb may be that you can offer no more than $5,000 less than list.  After about 3 to 4 weeks, if there have not been any acceptable offers, the home will be reduced usually $3,000 to $5,000.  At that time, where it may have passed under the radar of the investor sharks at the higher price, it now may catch the attention and offers and subsequent "Highest and Best" re-bids can and usually do end up higher than the previous price.

The problem is in trying to determine which of the 2 categories the property falls within.  The easiest way to determine that is to simply look at the comparable sales and listings in the immediate area.  If the listing is new and is priced at or below the comparables, don't consider offering less than list price, and you maybe even consider offering over list.  If the property is not a new listing but no more than 3 weeks since the last price adjustment, you may consider an offer up to 3% (depending on the total purchase price), and may be the only offer on the table.  The problem comes when you are bidding against others, which again pushes the price back up.  Remember, it is usually after 3 weeks, plus or minus a few days that the price gets reduced essentially creating an alert as if it were a new listing.  My clients are all on instant alerts which tells them within 15 minutes of a property hitting the market, as well as current listings that have price reductions that put them within my clients specific buying criteria.

So, to summarize, If it is a new listing, look at the comps and consider paying over list if the comps support a higher price.  If the home has been on the market about 2 to 3 weeks (the sweet spot for making an offer less than list), do just that, but don't wait.  If the price is reduced before your offer gets in, you are likely to have competition.

If I can help further, please don't hesitate to ask.

Best of luck, and Thanks for reading.
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November 14 2010
I would start at 85 to 90 percent of asking price. Assuming there are no other offers the bank will probably counter you and you can negotiate from there. Make sure you look at comparables in the area. It may already be priced to sell.


Good Luck
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November 13 2010
Here is your true situation.  If you decide to go ahead with this endeavor then Joanna has good advice.  However, be forewarned.  Assisting hundreds of homeowners who are in the foreclosure process or have already lost their home.  We are able to either get their home returned to them or get huge compensation from the lender that handled the foreclosure because that lender did not have legal authority to foreclose.  This incidents are recorded facts all over the US.  What this means to you is that the home you are trying to purchase has a clouded title.  Some are so clouded you cannot get title insurance.  The former owner actually has a right to come and reclaim that property as the action is fraud and the courts have ruled against the lenders and in favor of the owner.  Do you really want to be a part of that problem?  Do you really want a home with a clouded title?  Are you prepared to give up that home once you move in?  I am not condemning agents.  They simply have not been taught anything other than how to process these actions.  They have not been taught about the various types of foreclosure fraud, how a homeowner can fight and win against the lender and the process to do that.  They are not being told that their assistance in these transactions are an accessory to a felony.  They have also not been taught how a homeowner can protect themselves now and in the future from these lenders who have already been paid for the loan several times over.
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November 13 2010
There's no reason to not submit an offer to the bank at a fair price....  you never know what a seller will take, what is their motivation level, etc.    A good agent will help you by running comparables and giving you an idea of the home's worth.    Keep in mind that the banks today also have an idea of the home's value and probably won't take "too much" less.  Just be sure that your offer is strong with few contingencies and is presented with either a loan approval letter or copy of an asset statement showing you have the funds to pay cash.    Good luck!
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November 13 2010
 
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