Making an offer on a foreclosed home

**flightmedic** · 11-08-2009, 06:23 PM

Hello all,

Just a quick question to make sure I'm going in the right direction. I have found a home that is a foreclosure. My agent said that I need to make an offer 20K above the asking price b/c there will more than likely be multiple offers on the table. He said it will make it more appealing, so to speak, for my offer to be accepted. Just wondering if this is true.

Also, he stated that the bank requires the buyer to be qualified through their finance company. I called the number my agent gave me, of course it was this weekend, and they don't have an option to leave a message and they say call back during normal business hours and don't tell you what those hours are. I just thought that was strange and it worried me a bit. Just curious if this is normal practice and does the bank require you to finance thru this company? If what was true about what I read about this company online, i'm now really worried. A lot of negative feedback on them, of course, I can't be sure it's the same company, maybe just the same name.

Anyway, would love to hear someone's thoughts on this. Thanks for your time.

**Acresnacres** · 11-09-2009, 04:26 AM

Hello,

how to sell building ....

**Greg** · 11-09-2009, 04:50 AM

It is normal to get pre-qualified from the bank/seller's approved lender. You should be able to get your loan anywhere.

About the $20,000 over list. It depends on your market, the price of the house, the sold price of comparables and the demand for this house.

It sounds like your agent is expecting multiple offers and wants your offer to be the best. However, if their are multiple offers, the banks/sellers usually respond to all the offers with a call for their "highest and best offer". This is when you make your offer higher then the list price.

If I were you I would not make my offer higher than list until I know for sure there are multiple offers. Has your agent done a CMA to see if $20,000 above list price will even appraise. Not all foreclosures are deals.

**Acresnacres** · 11-09-2009, 04:54 AM

Thank you
Greg

for you suggestion...

**VegasAgent** · 11-09-2009, 02:03 PM

Greg is right, not all foreclosures ARE deals, especially in a market where there are multiple offers. You definitely want to get a good analysis on actual value from your agent before deciding what to offer. Some REO listing agents will call for highest and best, but others will not, however. So I advise my clients to just go in with almost the max of what they are willing to pay. If a highest and best is called for, then they can decide if they want to "up" the price a little or leave their offer on the table as written.

But first figure out what the real value is. I am not sure about your market, but in ours the foreclosures are definitely going for full market value with multiple offers. If you can find a "real" seller for the same price, you will have more protection against latent defects.

**flightmedic** · 11-09-2009, 04:51 PM

Thanks for the info....that's what I needed to know....wanted to make sure I was being told the truth. I'm new to all of this!!

**jasonthoele** · 11-10-2009, 08:12 PM

I am an agent in California and sell approx $30m a year in foreclosure properties and am happy to asnwer all REO property questions.

1. Many sellers (not all) will require you to be preapproved with their lender (typically the bank that owns the asset) just as a back up to your own lending.

2. $20k over list price may or may not be needed, weight your offer... is it cash, are you putting alot down, etc. These thing will deffinately play a part. Lastly... read your seller addendums when you get them, you need to make sure there is no clause stating you (the buyer) will be responsible for any variance from the appraised value. Sellers are doing this now and have "caught on" to buyers over bidding games.