Time and time again, some folks think that buying a foreclosure would be a breeze, and that they can submit a lowball offer. They must have seen, read, heard that they can get foreclosures for 30-50% less than list price. Remember, REO or bank owned listings are at, or nearly at the bottom price that the bank would approve.
I have submitted offers on behalf of several clients who, regardless of what the list price is, automatically come up with prices significantly less than list price.
Before writing the offers, I always give them a brief history of the property, how much it sold for last, what its appraised value is, how much was owed, how much the lender foreclosed, and most importantly, how it compares with other properties that have just recently sold, are pending, or active. This kind of information, I thought, would open their eyes on what a good offer might be.
After several misses --- when competing offers bid higher, or with better terms --- they are beginning to see the light.
The worst one we missed out on was on a nearly new 4200 sq ft house that sold for $1.2M in 2005, and was being foreclosed and listed at $749K. My client insisted on offering $700K even though I told him there were three other competing offers and after I gave him the background on the house. I was surprised when we were countered by the bank at $730K. My client said he will only go up to $720K. Well, needless to say, it sold at $730K to another couple. When my client's wife heard about what it finally closed at, she freaked! This is a couple who could have afforded to pay cash for it if they wanted to. But for the difference of $10K, they passed on this fabulous house.
It's a learning curve....a buyer's market doesn't mean a low ball market. ALWAYS give it your best shot. You may not get a second chance. So think positive: think BEST and HIGHEST offer!
Good luck, all!
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