My husband and I are looking to buy our first house. We have found a few foreclosure's we like. We are wondering what do we offer on it. They are nice homes and homes in that area are selling in the range of $180,000 - $200,000. The two homes we are looking at the bank's are asking $180,00 0 for one and $170,000 for the other. One needs a little more work then the other. So my question is, how low should our offer be if we were to make one? Someone told us 20% but I thought that was really low. Now I live in Michigan where there are lots of houses for sell and it's really a buyers market here. Oh, both of these homes have been on the market, in foreclosure for 3 months now if that matters. Thanks for your help!
2007-06-07 14:17:44 · 7 answers · asked by browneyegirl 3 in Business & Finance ➔ Renting & Real Estate
There both in a very nice subdivision. They are just about 10 house's apart from each other. There both in a great area and there were both built in 2003
2007-06-07 14:24:31 · update #1
I think 20% is a good start if you are just a regular homeowner. A lot of my friends who do this professionally start making a counter offer at least 35% below asking price for a foreclosure. A lot of times even lower. You have to know your market, and know how many foreclosures there are in your area. The banks are really feeling the squeeze because they own a record number of foreclosures - that are collecting dust, and taxes, and generating no income.
If you make enough offers at 20% discount - you will get one accepted.
2007-06-07 15:19:11 · answer #1 · answered by Christopher B 6 · 0⤊ 0⤋
Unless the bank is unbelievably desperate to move these properties (3 months is not desperate), you will be lucky if they don't toss your offer into the nearest shredder. Do NOT expect these foreclosures to come to you at fantastic deals. It just doesn't happen. The banks will hold out until a reasonable offer appears, since they are already taking a financial hit via the foreclosure.
If the homes are fairly priced for what they provide, you can expect to get no more than a 5% reduction in price.
Just last month, I worked with a buyer on a foreclosure on which the asking price was $174,900. By the end of the bidding war, the sale price exceeded $195,000, and my buyer just didn't want to go that high.
2007-06-07 21:52:55 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
Check with a realtor in your area to find out how many properties are for sale and how many have sold in the last 6-12 months. This will give you an idea of how distressed the market is in your area. You can bet that the lender has this information. This will help Gage how anxious the lender will be.
Some areas of Michigan are more distressed than others. If you are in a very distressed area you can low ball your offer more than in a less distressed area.
I am in Michigan and actually put an offer in for 57% of list price. I was turned down the first time. I waited for them to make a price reduction and gave the same offer and got the home. This took less than 3 months from when it was put on the market.
2007-06-08 10:35:36 · answer #3 · answered by QuarterRoy 2 · 0⤊ 0⤋
I live in Michigan and I know that there are so many houses for sale that it is crazy. We bought our house 1 1/2 years ago for 200,000. and right now houses in our neighbor hood are going for 169,000. because no one is buying. Foreclosurers are really only needed what is owed and taxes, but the bank wants to get rid of them so they don't have to be responsible. I would not offer more than 159,000, and go from there. Good luck and remember all the extra cost ( closing and appraisal).
2007-06-07 21:32:26 · answer #4 · answered by Susan R 2 · 0⤊ 0⤋
We have Bought a home recently, My wife and I, and we did look at quite a few forclosed homes. Our realitor is a good guy he talks a whole lot gabbing if you'd say. He Stated that most banks would drop the price of a forclosure 10% But feel free To ask fopr 20% The worst that would happen is that they wouldn't except your offer.
Hopes this helps :)
2007-06-07 21:26:29 · answer #5 · answered by Anonymous · 0⤊ 0⤋
michian had a trmendous amount of real estate fraud and many banks and wholesale lenders lost alot of money. especially around detroit. if the house is in good shape really take a look at it and see what repairs are needed and offer accordingly. if it is in nice shape and you feel the asking price is fair pay the asking price. But if it were me and i was in michigan were foreclosures are sky high i would offer 150 and see if they takeit. the longer it sits the more money they lose.
2007-06-07 21:27:46 · answer #6 · answered by Anonymous · 0⤊ 1⤋
Better check them out thoroughly. Are they on a toxic waste dump from yesteryear?? for example. There's a reason for everything.
2007-06-07 21:22:18 · answer #7 · answered by smiling_freds_biz_info 6 · 0⤊ 0⤋