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I would say if they just dropped it to 110k then you should offer 105k firm.
foreclosure home, needs a little work (nothing major, is structurally sound, no foundation issues, just needs carpet/tile replacement and some updating)
initial sale price was 121k, now dropped to 110k. estimated value of the home is around 150 - 160k
what kind of offer should I make?
im thinking offering 100k, with the hopes of getting them to meet in the middle in the 105k range? or should I readjust my thinking on that offer?
I would say if they just dropped it to 110k then you should offer 105k firm.
First thing to get in your head is the value isn't 150-160 if you can buy it for 105. How much are you planning to put down in cash?
well of course its not currently worth that much because it needs work, and is a foreclosure, but based on the neighborhood, all the homes are valued/selling for 140-170k.
and probably just the minimum down. saving more of our cash available for work on the house. monthly payment isnt an issue though, just trying to see what i should consider for my first offer.
Depends on what you're buying the property for. New primary residence? Rental? Flip?
Primary residence for the time being.
Are you pre-qualified?
yes. thanks for the unneccesary question.
Don't be so quick with the rolley eyes...it goes to whether your low ball offer will be taken seriously. If it's been on the market more than 6 months and you are pre-qualified and can close in 30 days I would hit them at 95K and see if they blink. You make money on real estate when you buy it right.
Is this a sale from the owner...or some kind of auction/gov't auction?
what would you expect them to counter at?
It depends. Who owns the loan?
its not an auction. its being handled by an agent. starcrest realty
edit: sorry i was initially trying to respond to another post
its a fannie mae property
No. I mean who OWNS the note they foreclosed on. If it's Fannie or Freddie you may see some wiggle room.
fannie. sorry i thought i was posting to someone else at first.
OK...it's gonna depend on the original note amount, the amount still due, and whether there is mortgage insurance in the picture to take some of the hit. I'd submit a written contract at 95K. They HAVE to take it to the seller. You might be pleasantly surprised.
just for my own reference, why is it that you suggest a fannie mae property would give me more wiggling room?
Then I'd say it depends on how much you time you have/want to have on your side. If you're in a hurry to get in a house, or worried that a higher bidder might come along, just start at the $105. If you don't mind waiting it out for a while and think the couple grand you might be able to save is worth the risk of someone else beating your offer, then go $100 or maybe even lower than that. You're really not talking about that big of a spread here.
They are under political pressure to get property off the books and cash in the bank. Plus, it's all funny money to those guys...when you are billions in the hole whats another 10K...
gotcha. its been on the market for around 2 months, and they just dropped it from 121k to 110k on April 1st. should I still shoot that kind of a lowball offer?
I would, but you have to factor in the risk factor if you have fallen in love with THIS specific property. Someone else may make a higher offer while they are considering yours. Otherwise, all they can do is say yes, no, or counter-offer and you can decide what to do then.
Plus, remember that on Fannies "list" now the asking price is 110K. It won't necessarily show the markdown. Your offer at 95K is within 13% (86.36% of the asking price to be exact) so isn't really that insulting.
good stuff. thanks.
FYI...
I was in a similar situation when I bought my house...it was a gov't foreclosure and the numbers were similar...(neighborhood values higher-price low-instant equity as soon as you move in)
but we lost out on 4 or 5 similar deals because we were trying to bid low and grab a great deal...
The last house we tried for was in a really nice neighborhood...the house was only in need of minor things and/or a paint job, and the area was known for selling really fast.
The agent told us that another couple had also missed out on the last 3 or 4 houses by bidding low and the last bid they lost out on...they actually bid 1,000 OVER the asking price...
we bid one-thousand three hundred OVER the asking price because we felt they were going to add a hundred or two hundred over...and we were right...we actually paid 1300 over the asking price and we did beat the other couple by a couple of hundred.
We moved in with instant equity and got the Obama mortgage credit (8,000 at closing and 2,000 a year in a mortgage credit tax return every year for 30 years!) We painted the inside and the outside and still had cash left over...not too bad for our neighborhood.
That is why I asked if it was a gov't auction or a gov't foreclosure--because if it is there are people out there who are looking for deals like this and will try and win the bids and turn over the properties asap and find other deals and turn them over again....
So depending on the neighborhood and how much or how bad you really want this particular house...I would recommend not letting the thirst for a great deal get in the way of landing the house you fall in love with. It is already a good deal to have instant equity in this market and trying to go to a rock bottom price might backfire.
Good luck.
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