Foreclosure how much should i offer

Pull the history of those listings to determine the list-price-to-sales-price ratio. If there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you will most likely need to offer above the asking price.

If there are plus offers, bear in mind that some of those may be all-cash offers. If you are obtaining financing, then you may need to increase the price of your offer to be considered. To have the most clout with the bank, you do not just want a pre-qualification letter. Instead, be sure you have a pre-approval letter , which shows that the lender has done a more thorough check of your ability to qualify for a mortgage.

Consider getting pre-approved by the lender who owns the property. You don't have to use this lender for your loan, but it could strengthen your offer, as banks tend to trust their own departments over other lenders' pre-approvals.

Sometimes, banks will pay for repairs, but they typically will not agree to do so at the offer stage. If there are problems found during a home inspection , renegotiate after your offer has been accepted.

At that point, you may have some leeway for repairing big-ticket items such as an inoperable furnace or hot water heater.

Smaller items and the things that were obvious when you made your offer are yours to deal with, though. Most REO foreclosures are sold as-is, which means you won't have much room for negotiating repairs. Shortening the inspection period can also sweeten your offer.

For example, if other buyers ask for 17 days to conduct inspections, and you ask for 10, you might be deemed the more serious buyer. An inspection is typically only for the buyer's information anyway.

Don't rush so much that you ignore serious issues, though. For instance, mold can occur in abandoned homes after they've been sitting vacant for a long period of time.

Go the extra mile and offer to share any fees with the bank. Some banks will not pay transfer fees, for example. If the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. The same thing is true for escrow fees.

Many banks also negotiate discount fees for title insurance. Before you make your offer, it's important to keep the appraisal in mind. If you offer over list price, bear in mind that the appraisal will need to substantiate that price. If you find yourself dealing with a low appraisal, you have options, so don't despair. Remember, the bank will most likely run into this problem with the next buyer who obtains financing. A bank-owned property can help you get more house for your money.

An agent who is experienced with these properties can help you make a competitive offer. Be aware of the pitfalls of an REO home, such as being sold as-is, and factor those into your offer as well. Working with a real estate agent who is familiar with the region is a great way to find foreclosures and other distressed homes for sale. You can also drive around a neighborhood you like and keep an eye out for any signs advertising a foreclosure.

By Jann Seal. Related Articles. Make an Educated Offer Do your research by getting comparables of properties in the same neighborhood and of the same size that have sold as foreclosures in the past six months.

References Bankrate. Witness the auction process. You may want to attend some foreclosure auctions as a spectator to get an idea of what they can be like. Be sure to especially take note of similar foreclosures and what people are bidding for them. This can help you form an idea of how much you should offer. Contact the seller named in the listing. The homeowner may have up to five business days before the foreclosure sale to pay off the default. Foreclosure auctions can also be postponed or terminated in short notice.

Ask as much as you can about the property during this time. Ask about the extent of maintenance needed on the property. Ask how long it's been vacated. Properties that have been unoccupied for a while might require more maintenance.

If the property has been on the market for a while, ask why there doesn't seem to be any demand for it. Research the property. However, because foreclosure auctions can be very fast-paced, you may not have time to do all of that before the sale. Find out as much as you can about the property and keep it in mind when making your bid.

Have your maximum bid pre-set. Use your comparative figures from similar foreclosure properties, other foreclosure auctions, and repair and debt estimates. Part 5. Contact the lender. A real-estate owned REO or bank-owned property is real estate that's owned by the bank that held the mortgage. You may have to make a direct request to a bank to be able to see its REO listings.

Hire a real estate agent. While this is not absolutely necessary, banks and lenders are less willing to cooperate with inexperienced buyers. Inspect the home. Make your offer: Making an offer on an REO is similar to making an offer on a short sale. Avoid negotiating like you're working with a homeowner. Banks aren't going to be interested in traditional incentives like lower closing costs and quick closings.

You're going to be negotiating almost exclusively on price when you're buying REO properties. Exercise patience. Your offer might not be accepted at first.

However, banks will often voluntarily lower the price over time as the property remains unsold. Keep in touch with your contact at the bank and be sure to check in every month about the status of the property. You might be able to buy it a few months down the road for the price you want. Offer a competitive bid. You're not the only one looking for REO properties. Other bidders will likely be looking at that same piece of real estate. So, your bid should be low, but competitive.

Otherwise, you'll get passed up for somebody who offered more money. Include your email address to get a message when this question is answered. Remember that research is the most important factor to getting a good bargain on a foreclosed property. Since sales can happen quickly it may not always be possible to obtain all the information you want, but you should at least research prices from similar sales. If you can't run a title search or have the property inspected, set aside funds for potential debts and repairs.

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