How different is the negotiating of...

I am using comps and market conditions. Same as for non foreclosure properties. remember one of the fall outs of the bail out may be for banks to play hardball figuring they can get a better deal out of Washington for the property. So if the price is a steal .....

Laura:  Since I work mostly with investors, it is all about the projected return for them on a property.  They all have profit criteria that they work against a property to decide what the offer amounts wiill be.  And of course, as a buyer in this market, you must have the patience of Job to wait out the slow moving loss mitigation departments within the banks.

Nondistressed homes in my area are fetching 5-10% more than distressed (REO and short sale.)  I know this from doing large amounts of BPOs.  This applies to cookie cutter subdivisions.

I do use comps to write offers.  We are seeing multiple offers on properties here so usually finding one slightly overpriced and ripe for a reduction and submitting comps can do the job!

Good morning Laura,

I work with many buyers who are looking at foreclosure properties in and around Mandarin, which is a desirable area in south Jacksonville.  If the current lien holder has already reduced it to a steal, I encourage buyers to come in at full price or very close to it.  Or, we try to figure (roughly) what it will take to bring the property up to value and calculate our offer that way.

Most of the time, the lien holder will have the Listing Agent bring the property on the market for their "wish" price, but if you watch closely, the prices can drop subtantially over that first month to 6 weeks.  Once we see the price get to the Oh My Gosh level, we come in around full asking price.

Make that "the prices can drop substantially" ~ sorry for the error : )

Lynn, I agree with you. The problem is not very buyer knows what low is real low.

Huiting, English please.

I've seen offers accepted at 30 cents on the dollar!  I think you need to figure the past patterns of the bank in question.  Are they dumping inventory or trying to minimize losses at all cost?

Laura-One way that I check is to look at the agent's list to sale ratio. For example, in our market Mickey Durham and a few select other agents handle mostly foreclosures.  When you look up his listings he has sold this year, his list to sale ratio is 97%.  (also in our MLS when you pull an agent ID, you can also select Special and isolate Lender Owned properties). I think 97% speaks volumes since he only handles foreclosures.  Now it's not true across the board as I can find discrepancies, but you get the drift.  A buyer wants a good deal, but many banks are not even responding when the offer is deemed "ridiculous."  Buyers have to know that banks aren't stupid although sometimes I don't agree with their logic in not getting the foreclosures off the books in a hurry.  But know that a human is on the other end in the Acquistion Dept making the final decision.