Zillow Advice: Buying Foreclosures - What's a reasonable offer on a foreclosure listed at 149k and city assessed at 206k?

When you buy a foreclosure ...

Sun, 12 Apr 2009 02:20:00 GMT

When you buy a foreclosure property, you have to realize that the people on the other end have no real emotional attachment to the property. To them, this is a file that needs to get resolved. Most Asset Managers work off a protocol. The price is set based on several BPO's and appraisals. The house is listed and systematically reduced until it is sold. The longer the house sits, the lower the price goes. If you are the only person making an offer, you have the luxury of starting lower. I personally wouldn't try anything less than 80% of list price. If you are one of many...then make the best possible offer you can...where you won't be disappointed if you don't get it. Best of Luck!!!

Depending on location, condition ...

Fri, 10 Apr 2009 21:13:00 GMT

Depending on location, condition and last sale price( that can be found in the tax records or at the court house).....149K sounds like a good price as it is...I would think 135K is in the ball park.

-Sean Malo

"The bank is asking 149 like ...

Fri, 10 Apr 2009 21:01:00 GMT

"The bank is asking 149 like I said. However, in 1999, which was the last purchase price, it was purchased for 137. I'm guessing what was owed on the house is nowhere near 149k."

Depends. I saw a foreclosure where the house sold in 2002 for $210,000 but in 2007 the owner ran up equity loans to to tune of $490,000.

So the previous sales price might not be related to the true debt on the home.

Check at the assessors and recorders office because the usually you will see a document that shows what the bank was owed when it took it back as this will be filed.

Hey guys, here's an update ...

Wed, 08 Apr 2009 12:13:00 GMT

Hey guys, here's an update from when I looked at the house yesterday. Maybe this will further help someone give me a better idea of an offer.

There is no damage done to the house (as might be seen in a lot of foreclosures) basically a lot of clean up. The people left quite a big of their stuff there. Then it absolutely needs new carpet throughout the house and in the basement. The water heater, a/c, furnace etc are all a few years old. The roof probably had another 5-7 years on it.

The bank is asking 149 like I said. However, in 1999, which was the last purchase price, it was purchased for 137. I'm guessing what was owed on the house is nowhere near 149k.

I was thinking a pretty good offer on it might be 115k with a full approval letter and 5k in earnest money (as oppose to the minimum of 1000)

Thanks guys! Please get back to me, I have a feeling I need to move fast on this!

A bank owned isn't a flexible ...

Wed, 08 Apr 2009 04:04:00 GMT

A bank owned isn't a flexible as a shortsale. Offer 129-135k

Thanks for all the advice ...

Tue, 07 Apr 2009 20:04:00 GMT

Thanks for all the advice guys! I was thinking of an offer around 130-135k. We are actually going to look at the property tonight and obviously I will get a better idea of what would NEED to be done. Then of course, if everything seems fairly stable (if the previous owners didn't destroy anything on the way out). I will probably hire the inspector and go from there.

I think Nathan makes a really ...

Tue, 07 Apr 2009 19:19:00 GMT

I think Nathan makes a really good point on making your offer as clean as possible along with full approval letter. The bank wants the most money possible on the easiest close possible. If they feel that you are solid as a buyer and know what you want, I think you have a better chance overall.

If it is a foreclosure, all ...

Tue, 07 Apr 2009 19:02:00 GMT

If it is a foreclosure, all bets are off. Make any offer you want to make. Ignore the tax/city assessed value. This is based on a previous year's value.

You should determine if there is work to be done to the property and subtract this from your offer with a written estimate from a contractor to prove the value of the repairs required. You can also call the listing agent to find out of the bank has previously rejected offers that were too low, and at what price and terms they were rejected.

Also, it's not always about the price. If you can pay cash, or have a FULL APPROVAL letter from your lender stating you are ready to close your loan, this often makes a big difference. Also, if you can close quickly this will also help you get the best price. A buyer agent can help you determine a good offer price and all of the other terms the bank is going to want-- including a deposit/earnest money deposit.

If you can put down a larger deposit/earnest money this makes the bank pay attention to your offer more seriously since you are putting your money on the line that you are ready to close at the price you are willing to pay.

Gosh I don't know the area ...

Tue, 07 Apr 2009 18:54:00 GMT

Gosh I don't know the area at all, but if condition is not a major issue what about an offer for $136,000? That would get rid of the bubble values completely and give you some wiggle room for updates. It would be close enough to the banks own number for them not to reject it out of hand. I don't know. Do you have a number that you think it's worth?

Well, the house was sold ...

Tue, 07 Apr 2009 15:25:00 GMT

Well, the house was sold in 1999 and sold for 138k. This area has steadily increased in values of homes and home prices.