House listing is not accurate- how much do I deduct from my offer?

Question

I want to make a counter-offer on a house, but the listing has 2 major inaccuracies: it lists 2 full baths (there is only 1.5- 1 bath and 1 powder room) and it lists 2 living areas and a breakfast nook- no dining (it has only has 1 living and 1 breakfast nook and no other common area). How much is the missing .5 bath and living area worth so I can reduce my offer? Additional house details:
- 1150 sq foot (1200-1400 is typical for area)
- House is foreclosure and bank is being difficult/inflexible- the want me to pay all fees/survey/inspection.
- House is listed "as-is", but needs 2 broken windows replaced and a new AC unit immediately. House is considered a fixer-upper in a very desirable neighborhood zip 75223.
- House has been on market 90 days when they sell typically in 7 days, and sometimes in 1 day!
Any advice is appreciated. Thanks.

Answer 1

unclear to me

who has title? the difficult bank or the people the bank is foreclosing on?

***
your evaluation of what it is worth today is in relationship to what similar 1.5 bath properties are selling for today, LESS the known costs of fixing up and the likely unknown costs.

"most" buyers these days insist on an inspection by an outside firm [at own expense] AND that the purchaser provide a one year warranty on all major elements of the home -- at seller's expense [paid for in closing and purchased from the firm that did the inspection].

if your maybe deal doesn't include these -- deduct 10% from comp values immediately, PLUS the costs of known problems like the windows and a/c. Also deduct to have all the locks changed.

and make sure your offer is contingent on the termite inspection [which seller pays for, not you]. I know that 75223 is in Dallas, TX area and you have termites there [my sister lives in suburbs].


GL and be wary -- sounds like plenty risk and maybe opportunity

{but then, you knew that already -- 90 days on market in area that supposedly sells quickly??}

Answer 2

With all the details in your Q, The property you may be interested in buying - in fact, any property - is ONLY worth what someone is willing to pay for it AND what the Seller is willing to sell it for. Not one penny more.

Apparently, you went through and inspected that property - or more than one property. You have (or should have) a pretty good idea what other properties in that area are selling for.

It doesn't make any difference:
A] IF the Seller has an appraisal for the property from the most well-known, honest appraiser in the world.
B] IF someone offers an "oral offer" to the Seller - [which isn't worth the paper its printed on].
C] IF the bank had to forclose on the property and it is now in their portfolio.

There is an old axiom in real estate: YOU [the Seller] name the price - I/we [the potential Buyer] name the terms;
YOU [the Seller] name the terms - I/we [the potential Buyer] name the price;
TOGETHER, WE [the Seller & potential Buyer] can, or should be able to, make the deal.

In your particular case, the bank is naming the terms. You should name a price - if you’re still interested. Whatever terms you want or think you should have should be in your agreement with the bank. Ask the bank if they will hold the mortgage. Ask if you can borrow the money for the repairs.

Whatever terms you want or think you should have, they should be in the agreement of sale or the contract.

Yes, there are or may be real estate brokers, agents, attorneys, consultants, property inspectors and others - including family members and friends - who may offer their advice and opinions. In the end, no one else's signatures appear "on the dotted line" except yours, as the potential Buyer, AND the Seller's [and, of course, the witness(es)].

In the case of an estate (the owner of the property is deceased), the Executor's/Executrix's (sorry ladies, but this is what the female Executor is known and referred to as), appears on the line where the Seller signs.

You know what type of mortgage you qualify for [or you should know] and the type which applies to that property.

This may be very difficult for some folks to do:
Make and submit written offers.
In other words: Put your money where your mouth is.

At the very most, you'll buy that property. At the very least the answer you will or may get is a flat "NO" - without any explanation. [Other than in love and romance, "NO" never hurt anyone.] A side thought: "NO" might mean "not right now".
It doesn't mean the Seller won't be in a much better frame of mind tomorrow, next week, next month, 3 months from now or even next year.

Somewhere in the middle - with a counter-offer - could be "the crack in the door" all the parties need for continued negotiation.

One of my mentors told me this:
Remember this: SW3 - N!
Some Will. Some Won't. So What! NEXT!

If you have any doubts about any of the points I mentioned, it might not be a bad idea "to get your ducks lined-up" before you get into something WAAYYYY over your head.

Thank you for asking your question. I enjoyed taking the time to answer your question. You did a great job - not only for your information, but for every other person interested in reading my answer. Thanks to everyone for reading my answer.

I wish you well!

VTY,
Ron Berue
Yes, that is my real last name.

Answer 3

A few observations:

How the agent listed the property has little to do with what the owner will accept.

It is customary for the buyer to pay for their own inspection, survey, title insurance, etc. Asking the bank to pay for these just increases the amount the bank must get for the house to break even. Ever hear "there is no such thing as a free lunch"?

Bank-owned foreclosure properties are almost ALWAYS sold "as-is". They want to get rid of the property, and don't want to put more money into it. Fixing the house up (even while under contract with a buyer) is a risk - what if the buyer defaults?

The house has probably been on the market a while because of the condition it is in. It is also possible that it is or has been overpriced.

If the house is listed with a REALTOR®, I'd suggest finding a another REALTOR® to assist you as your buyer's agent. They can help you with presentation of an offer, and their services are often paid for by the seller.

Answer 4

Not to be Mean but as an Investor I write offers all day to bank REO properties In this manner Sold as is in as is condition no warranties or claims implied plus i pay all fee's. So once again not being mean but if you ask for the sky the banks know there's guys out there like me buying properties as is, Lets remember someones loss your gain the property is a foreclosure AS-IS and is at a Lower Rate then Houses being sold in Non- Forclosure Status....

Answer 5

The number of bathrooms or any other rooms did not effect the appraisal, it was square footage only.

Banks typically are not in the business of negotating, you really will not be going back and forth. They really do not care if it stays on the market, it is a tax write off as it stands now. Banks typically also list at the rock bottom price, as they are not concerned with making a profit.

Answer 6

The various lenders have the way they do business, including being difficult, down to what works for them. They don't care about what works for you or what you want. They don't care if the listing is inaccurate, they will make you sign a bazillion forms releasing them of any liability for any errors in anything on advertising or condition of the house.

You will purchase on their terms or you won't purchase - basically, that is the attitude.

Offer whatever you want on the home based on your research, but I wouldn't start packing yet, sounds like they are holding out for a full price offer.

Answer 7

hahahahahahahahaha. This is what the bank is going to do. See they could care less what you think, it is probably already listed close to rock bottom price. They will let it sit there for another 90 days because it is a write off for them Just figure out if it is worth what you offered to you. If it is move forward, if not move on. Most banks negotiate very little.

Answer 8

you in a sense answered your own question, the bank has it and has set its demands for a sale, if at this time they are
unwilling to change their tune; then only time on the market will make them think about lowering the asking price

Answer 9

2 major inaccuracies sounds like lies to me. If I were you, I wouldn't offer anything. Keep walking past that house. You have to wonder, what they are intentionally not disclosing.