Foreclosures? How do the sell of these properties work?

Question

Ok. There's this house for sale. It's worth about $50,000 more than what they are asking. It is a foreclosure. I searched public records and it appears in the sales record that a bank aquired the property back in January and the price that is listed is about $20,000 less than the appraisal which is the same amount the first owner purchased the home for. Is that price that is listed where the bank took it back the amount owed on the mortgage and the amount they are wanting now?

I made an offer on the house for about $10,000 over asking but that's still $15,000 less than what the bank got the property for. Did I offer too little? There are already multiple offers on the house. Did they price it so low just to get attention?

But wouldn't people be more apt to offering $20,000 over asking just because they knew they'd still be getting the house at $30,000 below appraisal or something? I mean would someone offer that much more knowing the asking price was what it is? I figured someone would see this as an easy money making opportunity and blow my offer out of the water.

It's not being sold by the bank though.. An actual realty company is handling it. Sorry.. these questions might sound dumb but it's the first offer I've ever made ... This would be my first house.

Answer 1

At the point where the property is now, the bank/owner is just like any other owner, except that getting approval is made complicated by the owner being a corporation that has to be prepared to justify their decision to shareholders.

However, while many homeowners live in the property until it is sold, the bank has no real use for the house. They want to sell, and they want to sell yesterday. That's why it was priced low.

Don't put too much stock in there being "multiple offers". It may be an exagerration. I was told the same thing when I recently bought a f/c property, and we offered slightly below asking price. "Multiple offers" may mean that the phone rang this morning. I suspect your offer will be accepted, and hopefully you gave them a limited amount of time to accept, so you're not "on hold" while they wait to see if they get another offer.

You probably need an attorney, because several things can go wrong in buying in this situation if left to the date of closing to resolve. One is whether the bank's title work is completed. The f/c may be finished in the f/c records, but the deed from the court to the bank may be sitting in a file somewhere because the attorneys forgot to file it. That can cause some delays if left to the last minute. Another is that you and your lender might not notice that the bank is insisting that "time is of the essence", so they are taking their time as usual, expecting that a two day delay is no big deal to anyone, but it can cause you to forfeit your deposit and lose the deal.

Answer 2

Why are you asking these questions here?
If the holding bank is putting this house up for out right sale, and it is not to be auctioned, they may sell it to you out right?

Pull up your pants, tighten your belt, and go to the bank and speak with the person that handles their foreclosures. If they are not auctioning off the house, they will tell you anything you want to know.

That's what people that do this stuff all the time do, and they are the ones that usually buy these houses. But if it's an auction, that's a different deal....they can only give you certain info. out of fairness to others, according to laws, regulations, and their own rules & policies.

So go see them in person. You don't even have to call...just go! They won't bite. They want to sell the house to you, and get it off their books! They will welcome your interest! Work your way in, get the real poop, and you might be a winner.

JUST GO THERE! And....The Best of Luck to You!