13 July 2008
How To Make An Offer On A Foreclosure- Brought to you by CAROL LEE, Realtor, Coldwell Banker, Westlake
I have several clients looking at foreclosures. Some are investors, some looking to fix them up to live in. And at times, it has been a frustrating experience for them. They make what seems to be a reasonable offer, and get outbid. Or they are too late. By the time they get their preapproval from a direct lender, and decide what they want to offer, the home is in escrow already. My goal, of course, it to help make the process as stress free as possible.The question being asked, of course, is "What should I offer" "How low can I go? Everyone wants a deal, of course! So do I!The short answer to those questions is to consult with your Realtor- s/he should have a grasp of the local market. The answer may also be different depending on the price range and area you are looking in. Many listing agents price the bank owned properties below market to generate multiple offers and bidding wars over asking price. And the strategy works, as that is what happens. These homes often go into escrow within days (hours?) of being listed. Review comps with your Realtor, and take it from there. A client asked recently how much over or under asking are the bank owned properties going for. "Good question", I thought, I had never looked at that in detail, just went on my gut and what my perusal of data told me. So I looked into it.I looked at REO's that sold in SIMI VALLEY from January through July 9, 2008. As I have been showing int he lower price points, I checked those that sold in the $350-$450K price range. Of the 21 properties that came up, 7 sold at or above list (100-104% above asking price.) Twelve sold 95-100% below asking price. And only 2 old at 95% of list price. (This does not include any seller paid costs )In THOUSAND OAKS there were 7 REO's that met that criteria. One sold at almost 13% over list,, 3 sold at or just about list, 1 sold at 95-99% of list, and 2 sold at under 95% of asking price. Other areas showed similar trends.Given that information, look at comps for the area, and make your best offer! When it is a bank owned home in multiple offers, do not expect any negotiations. Make your best and final offer the first time around. Pick that number, which, if you do not get it, you know that you tried your best, and if you don't get it, you know you tried. If the house is truly what you are looking for, or has the potential you want, offer that 3 or 5 percent over asking. On a $350,000 home, it isn't a huge amount of difference in your monthly mortgage payments. And you may finally get the house you want. Click here to
SEARCH FOR HOMES IN OAK PARK, AGOURA, WESTLAKE, AND ALL OF VENTURA COUNTY.
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