It's a bank owned house and I am paying cash. Do I include a check for earnest money with the offer? Is it true that the more I pay the more likely they are to accept it?
2007-08-24 14:24:49 · 4 answers · asked by PlasticTrees 2 in Business & Finance ➔ Renting & Real Estate
Without earnest money, it's really not an offer.
Yes, the more you put as earnest money, the more serious you look. With a bank owned property, they are generally more concerned with the likelihood it will close than they are with the price.
No matter what state you are in, I can assure you that a squad of lawyers is going to be looking at your offer before it is accepted, and will probably be countered with all kinds of legal voodoo that looks innocuous, but could be a pain in the rear by the time you close.
Does that suggest that you might want an attorney on your side early on? I think it does.
2007-08-24 14:33:35 · answer #1 · answered by open4one 7 · 0⤊ 0⤋
PLEASE tell me you are working with a Realtor?!?!?!?! The bank will pay the Realtor, not you. They could advise you of all of this!
Even if you are paying cash, MOST people still usually place earnest money with the title company that is preparing the closing or an attorney that is handling the closing, when making an offer on the property. This shows the seller that you are serious about purchasing the property. You will also need a letter from your bank showing "proof of funds". This way the seller (the bank) will know that again, you are serious and that they can trust that you will close on the property.
DO NOT offer them exactly what they want and what you can afford, offer lower and see what they counter offer. You may go back and forth a few times, but if the bank wants to get rid of the property and they've had it on their books for a while, they'll be willing to negotiate the deal.
Good Luck!
2007-08-24 14:35:38 · answer #2 · answered by jjdriskel 3 · 1⤊ 0⤋
Let me give you a real life example on a bank owned house.
House listed at $116,900
Two offers less than full asking price
Third offer comes in full price and earnest money
Who do you think gets to purchase the house?
The third offer came in at full price because by law they can't ask what the other offers were.
The third offer got it because the other two needed loans and the third offer was cash.
Did they make a good decision? YES! They bought the house for $116,900, it was assessed just two weeks ago at $146,500 and with paint and carpet could easily sell for more. The comps were $146,000 to $167,000 at the time of purchase and a house two doors down is listed at $178,000 and is smaller.
Actually, the lender gave back the earnest money and money for the taxes so the price paid was $114,500!
True story I know because I was the lucky buyer
2007-08-24 15:10:11 · answer #3 · answered by Anonymous · 1⤊ 0⤋
Yes, they ask for an earnest money deposit to prove that you are making a serious offer. I am not exactly sure how true it is of whether the more you pay the more likely they are to accept it. But I do know that if you make a very reasonable offer accompanied by the check then your offer will be considered greatly.
2007-08-24 14:35:12 · answer #4 · answered by Jenny 3 · 0⤊ 0⤋