Buying a Foreclosed home

I’m a neewbie from Ohio. Looking to buy a home for the family. There are several new home listed in the Columbus area [1999 or later]. I’m interested in one listed at $138k, appraised valued at $108K.

Where do I begin?

How do I make an offer?

How much should I offer?

Would the bank who holds the property pay closing/broker fees?

How long does the process take?

Help!!! :-\


You might want to call the the bank and speak to the person that is in charge of REOs or non performing assets. At that point they should ask you to fax a written offer that will be countered undoubtedly. Ususally banks will let a proerty go at about 10% not more than 20% of the FMV (fair market value). I haven’t purchased any REOs but in theory this is what usually happens.

I would make a offer at about…103.5K. That’s 25% below FMV. Someone once said that if the offer doesn’t sound crazy to you, you are paying too much! Let them counter. It should take about the average time to close and closing costs are always negotiable! It may vary from state to state.

If you are buying directly from the bank broker fees should not apply. Check around your area to find out the going rate.

Good luck

Howdy Jolue:

Sounds like you are in a buyers market where you may not have very many other buyers competing with you. Make a low offer to test the waters. I just bought a car and the guy took the offer too fast. We may have paid a few hundred to much but we are still happy. Like Millionaire2b said offer about the tax assesed value or even a little less.

Do you have the forms to make the offer? A standard contract is available on line thru your local real estate commission in most states. The bank too may have some other forms they use in addition to the contract.

The seller will usually pay the Realtor and if you ask the real estate commission there are no going rates. The fees are totally negotiable. The are flat fee agents that offer little service or full service agents that get paid 5 to 10 % depending on the property and company policies. It is actually against antitrust laws for agents to discuss going rates and standard fees. All this really does not matter if the bank pays the fee anyway. If you have a friend that can make the offer for you they may be able to charge less and get paid too from the banks agent as a buyers agent?

The bank should respond to your offer within a week. I have had same day response and it just depends on the bank’s policies. The closing will take 30 to 45 days depending on the title company and your lender mostly. Go ahead and get all the lender stuff done you can. Most lenders will prequalify you and in a lot of areas this is actually necessary before the offer is even looked at by the banks. They have been burned by investors trying to flip the property while the earnest money check never clears but the contract if still valid.

Hope this helps a little.

Am I reading correctly listed 138k appraisal 108k? If so this is a SELLERS market and the property is over priced and if the market drops you will be owing more than its worth. It is also harder to find a bank that will give a loan for an amount more than the home is worth, you will have to come up with cash to cover the rest.

busy builders,

I think JoLue is referring to the appraised value for tax purposes by the county. I’m no expert but I think fair market value is 20% or better above tax valuation.